Because filling the space with overly long lines, as it used to do, makes for a horrible reading experience.
By making text flow to 100% of the width you can easily resize the browser window for everyone's perfect reading width.
I usually run my browser tiled to 50% of the screen, the new design wastes a lot of space at that size (you have to shrink to really narrow width before it enters 'mobile mode' and uses 100% of the width again - I mean it's pretty insane, you can see more text at say 30% width, but at 40%-60% it pops out that useless white space padding on the left leading to a narrower effective text width)
I totally agree with you: I like to use my browser at ~50% of screen width on a 27" screen, so it looks terrible there because of all the wasted space. If they made it work at 50% width like it does at 30% width, I'd have no complaints.