Do you mean why is LaTeX the base tools and library of options so large? Because it supports a number of different document types, languages and formatting options. Do you want a mathematical/scientific journal article? Humanities? Is it a short story that you're submitting for review or do you want it formatted for printing? A poster? A presentation? What language(s) will you need? Different fonts for different effects or preferences. Do you want a modern look? To imitate something from a different time?

The bulk of it is stuff you don't need. Most folks probably don't need anything more than the format for the journal they're submitting to or a couple standard formats for books or articles. But your article format and mine might be different, either by aesthetic preference or technical requirement (maybe I'm publishing something on ancient Greek, and you're publishing a paper on some number theory topic).

However, by using a common language/environment we get things like CTAN which help to spread the features we added or allow us to discover features we want so we don't have to reinvent the wheel (though it still happens). It's also probably so large because it's been around so long. LaTeX dates to 1984, with TeX being released in 1978. So we have 31 and 37 years of community contributions to these tools.

When Don Knuth wrote TeX, the engine underlying LaTeX, he made sure that typesetting was a top priority. This includes all sorts of novel spacing, hyphenation, and other algorithms. See some more examples here: http://en.wikipedia.org/wiki/TeX#Typesetting_system

For anyone who appreciates Typography, there are few things out there that can produce aesthetic results as pleasing as LaTeX.

It does have its downsides though, no question, including a steep learning curve, unintuitive error msgs etc.

The great majority of the space is documentation, source, and fonts; see http://tex.stackexchange.com/a/119763/339 .

At the 2014 TeX conference one speaker gave out a MacTeX distributions (that's based on TeX Live) on a 8GB USB stick. Personally I wonder whether putting a lot of effort into creating stripped-down versions is worthwhile.