Because war like that isn't FUN. It's not entertaining to have 1-turn wars. There's no tension. You wipe the enemy out before he can react, which is fun the first time but ultimately reduces the entire warfare game into a chore. And if the AI did it too, we'd have the joyous experience of our best buddy turning on us and destroying all our ships and shipyards before we have a chance to react (an experience you can already enjoy in multiplayer). That's not fun. It involves basically zero strategy or tactics. And judging by the blueprints that the AI relies on, it didn't seem to occur to the devs that people might strap 20 engines on a ship. They seem to have regarded putting 3 on as an outrageously risque design move.
Be honest. What's your win rate in combats? I'd estimate mine, after 500 hours, to be around 99%. I can always pick my battles, and my biggest, baddest fleet can take on 20 other fleets one at a time in a single turn. That was fun the first couple of times, but after that the complete lack of military challenge made every victory a foregone conclusion and felt empty. I can ALWAYS get reinforcements to the front the turn they're built; I can ALWAYS park a fresh, full fleet from the other side of the universe on a damaged one to protect it. It's like the problem that MOO2's turn-base tactical combat always eventually ended up with; the player could just build a mega-fleet that would wipe out any rival before they had a chance to fight back. The result? You never took any casualties ever again, and combat became a chore.
Stuff moves too fast, and it's a big problem. There's no logistical planning required, not the logistics stat that is really 'Fleetcap', but actual supply lines and gathering forces is too easy even on vast maps. That kills military strategy stone dead. You never need to plot a cunning flank attack, because you're just flying your fleet in from whatever direction and killing everything in 1-2 turns. The story you're telling about the Snathi fleets should be viewed as a bad thing, bordering on broken, not a great anecdote about this awesome time that I did this - sure, it'd be a cool thing if that wasn't what happened in EVERY SINGLE WAR. It's not unusual. There's nothing cool or awesome or unique about it. If you just got insanely lucky one time and this one fleet that should have been toast somehow survived against the odds, that's great because you know that 9 times out of 10 it wouldn't have turned out that way. But if it's the same every time, then it causes problems; I run my empire on a military shoestring because I know that every 1 of my ships can kill 10, 100, 1000 times as many of the enemy, simply because I can attack 10 times as often per turn.
That's why I'm more or less in favour of end-move-on-attack; it gives the AI the chance to react to a war before it's dead, it punishes the player for excessive engine stacking (without preventing him from doing it - you could still make your 198 move constructor, but the temptation to make warships with 50 moves is seriously reduced when they're not using it) and it would just generally be better for the game than keeping really high movement rate and allowing you to attack many times per turn.