Because generally, the amount of money required by life insurance goes down as you get older.
If you're 30 with a wife and two kids? Then your salary suddenly disappearing would have a monumental impact on your family. Your income towards daily life disappears. There are mortgage payments to be handled. Car payments to be handled. College funds to try to build. Etc. Etc.
If you're 70 and retired with your wife? Then the financial requirements suddenly get way less. It might be as low as simply funeral costs.
Now, add the following data point: the older you get, the more likely it is that you'll die... which means that the older you are, the larger (percentage-wise) that the insurance will cost you.
So, putting that all together... how would you create an insurance plan for yourself?
You could say, "I'm going to get a whole-life policy." Which will cover you until you die. Which is fine... but both of those factors above make things suboptimal. The plan has to be priced so that your payments when younger subsidize the higher cost for when you're older - which is why 'Term Life' is cheaper than 'Whole Life'. And the "I need more coverage!" factor when you're younger requires you to be insured for more than you'd absolutely require when you're older.
You could say, "I'm just going to get Term Life." Which, again, is fine. Except you'd bear increasing costs for each term, assuming you kept the same coverage level each time.
Or you could say, "I'm going to get Term Life... except I'm going to reduce the coverage for each term I buy."
... which is pretty much the decreasing payout term life insurance is that you're describing. They're reducing the coverage for you - and doing so in a way that will keep your payments consistent from year to year.
Don't get me wrong - their reductions might not actually align with what the costs might be. You'd be smart to check each year whether a fresh Term Life policy would be cheaper (aka, if your cost-to-insure didn't actually go up 8% per year) and whether the proposed payout makes sense for your financial situation (if you have more financial need from a life insurance payout, such as from having another kid.)
But as it is? The scheme is generally a smart way of balancing those factors to try to keep the cost low: it covers you more now (when you need it) and reduces the coverage when it gets more expensive (and you don't need as much of it.)