Bars are loud. People smoking outside of bars late at night tend to be very loud and sometimes get in fights. If you're trying to go to sleep, it's annoying to have a crowd of drunk young men screaming at each other outside your window.
Politicians don't want to go against MADD, and business owners might not want to expand payroll to staff those hours where people are far more likely to get either violent or violently ill.
Because the best way to reduce drunk driving risk is to force everyone out of bars at more or less the same time. Back in my teens and twenties I found myself intervening, with varied levels of success, to prevent drunken trips to the store because "beer-o'clock" was nigh and it was the last chance to obtain more alcohol.
It's always seemed crazy to create a sudden spike in the number of impaired drivers.
What I'd like to see is a comparison of statistics from areas with early last call laws and other jurisdictions with later last call or no restrictions. It would be great to move past what feels good and use some actual data to make a our policies.
In the UK they pushed for pubs to close much earlier. The effect was that people would start drinking earlier and more (at home), and binging because stuff closes earlier. TL;DR it backfired.