Answer: because that may be the only way it will ever get made. 

The reason, of course, is money.  Making a movie is extremely expensive in Hollywood, which in turn makes it extremely difficult to break into the industry.  But even if you get that one in a thousand break - what makes you think they're going to let you make a movie your way, kiddo?  Even a big name can have trouble in that department. 

So if you really want to make a movie your own way, you may also have to come up with the money.  And unless you're Mr. Gates, that won't amount to a Hollywood budget. 

But maybe a micro budget will do. 
    
Film 

With very few exceptions, all commercial feature productions are shot on film.  And with good reason - film is impressive, film is beautiful, film offers the ultimate in image quality.  But film is also, unfortunately, expensive.  Especially in the 35mm format in which it's shown in movie theaters. 

So while major productions are shot directly on 35mm, the micro-budget film maker will generally have to make do with 16mm.  The 16mm negative can later be blown up to 35mm, and if it's photographed well, the result will be very good (though still not quite as good as 35mm).  The process of blowing 16mm up to 35mm is also expensive, however.  In fact, if the filmmaker keeps the shooting ratio low (ratio of footage shot to footage actually on screen), in the long run it really doesn't cost much more to shoot in 35mm in the first place.  But, of course, that's the long run - and what we don't have is money in the short run. 

Thus we've arrived at the whole point of micro-budget movie making.  Which is to spend a (relatively) modest amount of money now, and end up with something that looks impressive on a VHS tape - impressive enough to get an investor or a production company to come up with a large amount of money later, to finance an upgrade to a general release. 

The absolute minimum for shooting a feature in 16mm seems to be in the neighborhood of $7000; that's what Robert Rodriguez spent to make El Mariachi.  And almost all of that went for film stock, developing the negative, and transfer of the negative directly to 3/4" video tape (he didn't make a film print).  He got the use of a 16mm camera for free (he borrowed it from a friend), and edited his 3/4" video tape on an old U-Matic that also didn't cost him anything.  (So if you don't have access to a camera or editing equipment, that could add more to your spending.  For the full story on how Mr. Rodriguez made his movie, see his book Rebel Without a Crew.) 

Furthermore, El Mariachi was also shot without synch sound.  The dialog for a scene was not recorded at the time the picture was shot, but instead just afterwards, using an ordinary cassette recorder as the actors repeated their lines (hopefully in the same manner as during filming).  Later, in editing, the beginning of  an actor's recorded dialog would be manually synchronized with the actor's image on film; and when the two began to drift apart (as they inevitably would), the picture was simply cut away to something else, such as a reaction shot. 

Now El Mariachi was an action movie (to say the least), without much use for long passages of dialog.  So if you plan on having lots of dialog in your own feature, you might instead have to shoot synch sound (necessitating a more expensive camera, plus a specialized audio recorder), or plan on a long, tedious, and perhaps expensive process of "looping" the dialog, to add it later in post-production. 

So as you can see, $7000 is really the bottom of the bargain basement for film.  You might spend more.  But in return for the money, what you get is a visual image of the highest possible quality. 
    
Video 

Due to the inherently expensive nature of film, micro-budget movie makers have often been drawn to the alternative of video - because in comparison to film stock, video tape is dirt cheap. 

In the past, however, there was only analog video.  The professional format, Beta SP, was reasonably good, but the cameras themselves were very expensive - tens of thousands of dollars to buy, or correspondingly expensive to rent.  Not much improvement on 16mm here (except possibly for documentaries, with their very high shooting ratios).  On the other hand, the ultimate development for consumer grade cameras, the High 8 format, was vastly cheaper - but also fell noticeably short in the quality of the images it made. 

All this changed, however, with the introduction of digital video. 
    
Digital Video 

Digital video bears the same relation to analog video that an audio CD (digital) bears to a common audio cassette (analog).  The advantages of digital are that its signal is practically impervious to "noise" (the bane of analog); a perfect digital copy can be made of a digital original, with no degradation; and digital video information is in the same "language" that a computer uses, permitting its transfer to such a device (for manipulation or editing) by merely putting it into a file format the computer can recognize. 

The introduction of digital video to the marketplace took place in the mid-1990's - and immediately caused something of a sensation.  A camera like the Sony VX-1000 was capable of making pictures that were more or less on par with professional Beta SP, but for much less money.  At the same time a computing revolution was beginning to permit the editing of video on desktop machines.  The result, by the late 1990's, has been the birth of desktop video - true broadcast quality video, shot with relatively inexpensive "prosumer" cameras and edited on home computers. 
  
Mini DV 

Mini DV is the type of digital video employed in consumer and "prosumer" grade cameras, referring both to the physical format of the tape ("mini", with little cassettes about the same size as DAT tapes), and the format of the digital information that is recorded ("DV").  There are also professional digital video formats, in a literally bewildering variety of  types and sizes, but these won't concern us here - they are all significantly more expensive, and we're talking micro-budget.  Which means DV. 
  
Alternatives 

So now a reasonable video alternative has finally been made viable for micro-budget movie making.  But with alternatives, of course, come decisions. Decisions, decisions. 

First decision: should you shoot on film - or video?