I agree it can seem counter-intuitive, compared to a normal loan, but there are some different characteristics for bonds. Here are some points that come to mind:
Fixed income stream. By not repaying the principal, and having a fixed interest rate, it is known exactly how much the bond holder will receive in income (and how much the issuer will have to pay). This is quite helpful for both sides, plus it helps with understanding its value for trading it on the secondary market.
Cash flow. By not having to to repay principal over the life of the bond, it allows the borrower to utilise more of the cash up front (for investment etc) and it can either make a plan to repay the principal later (like an interest only mortgage) or rollover the debt by issuing another bond to pay for the redemption (as generally happens with governments).
Historical precedent. Bonds have existed for a very long time, when the physical piece of paper was the asset and you had a literal coupon to claim interest. This was probably quite a nice and simple way of agreeing debt obligations. There are even perpetual bonds, which have no maturity date!