Because if it's not, people won't read it. This holds true for all aspects and audiences. If the reader can't connect with the characters, the setting, the events, then they'll put down the book (unless they're forced to pretend to read it, as in class). However, this means a lot of different things.
It means that a story about women's relationships may be highly relatable to and popular among women, but much less so among men -- as is the norm in romance writing. This influences the respectability and profitability of genres, not always in the same way.
It means that people outside the target audience, for whom a story is relatable, may mock or ignore it. This is a problem if those people control most of the literary sphere. I once tried to explain to SFPA folks why a given poem was in fact speculative poetry, by highlighting all the African motifs that made it so. Most of them still didn't get it, because they're not African, not familiar with that culture, and to them bones are something to pick out of dinner not something to work magic with or talk to the ancestors. It was relatable to me but not to them. Nobody's going to vote for a poem they don't think meets the genre qualifications, and in fact it may be disqualified without voters ever even getting to see it. And that's how diverse voices get stifled.
It means that people different from those in control of the literary sphere will rarely if ever find any published material relatable. This makes it difficult for them to become literate and to tell their own stories -- which is often not an accident. When I designed coursework for adult remedial education in prison, those guys could barely read or write. They had no idea that people like them could write things they had experienced and cared about. I graded papers on how to hotwire a car, and I introduced the guys to Lorna Dee Cervantes and Robert Hayden. They damn well found that relatable, and it changed some lives.
It means that an astute writer can make things relatable by using universal human experiences to imbue exotic ones with familiarity. Roots is about slavery, an experience few if any readers have had; and about black people, which not many outsiders care about. Yet it captivated America, especially when transposed to television, because it was a family story. Everyone understands love and loss because those are endemic to the human condition. By using those universal themes, the author made a black family's story relatable to everyone.
It means that readers who like exploring strange new worlds can seek out stories very different than what they already know. You can learn to understand things, and then they become relatable not because they have changed but because you have. It is this interest in difference, this agglutinative growth process, that makes diversity work. It drives everything from rainbow ensemble casts like Firefly to Afro-Futurism to chicken tikka tacos. And its written in the history of our species itself, with DNA from Homo sapiens including Neanderthal, Denisovan, and one we haven't even pinned down yet. If there's one thing we know about humans, for all their squabbles, it's that they ultimately can't resist fooling around with new things.
So when you see someone mentioning how "relatable" a story is, ask yourself ... relatable to whom?