Dartmouth BASIC was designed for teletype-style, hard-copy printing terminals, rather than video displays. Conveniently your whole session was printed out, so you could take your email and program listing home with you. Line-by line editing was practical for printing terminals, and line-by-line I/O scaled well across multiple terminals on a timesharing system.
Line editing also worked well on microcomputers with cursor movement (like the C64) - you could edit code in place just by overtyping and hitting "return" for the appropriate line.
On a slightly unrelated note, teletypes date back to the 19th century telegraph (and typewriter) era.
https://en.wikipedia.org/wiki/Teleprinter