Because terminals are in fact terminal emulators. They emulate hardware that are line based. and because they come from a very distant past. First terminals were no smarter that a typewriter.

Nowadays, we have screens that can be redrwawn at will. In a text editor, you can click anywhere to set the insertion cursor wherever you want, but back in the older days, there was no screen. There was just a printer and a keyboard. Eventually, you can erase the last character you've typed, or kill the whole line, but not much.

Over time, terminals (the hardware one) became more capable and smarter, and eventually the mythical VT100 came to existence. terminal emulators that we use today emulate a VT100, more or less, with some additions (for example, current terminal emulators correctly handle national char : european languages and their weird symbols (ç Æ, ñ, Å...), greek, hebrew, asian languages, in fact most unicode symbols)

Their set of commands existed before graphical UI existed. In a terminal, Control-C is caught by the terminal driver and mapped to a signal that kindly ask the current process to terminate. This is history. Also note that in a terminal, you don't really edit text (not counting the fact that you can run editors in full screen mode), you type a letter, this letter is sent to the computer, the computer sends back the letter and this letter is thus printed on screen. When you hit enter, the remote computer executes the command and you just receive output.

Why didn' we invent terminals where we can edit like in any other text window ? Because it does not make sense. A terminal is sequential : logically we type in sequence a command and get an answer. Also because of how it works. each character is sent and when (if) it comes back, it is printed on screen. How does a mouse cursor, mobile insertion cursor fits in this model ?

https://en.wikipedia.org/wiki/Computer_terminal