Same reason that some momos choose to live nearby active volcanoes, fault zones, in fire country, tornado country, blizzard country, desert wastelands, tsunami areas or floodplains, et al. Not so much stupidity at play, methinks, but folks wanting to live near ceratin aspects of the natural world despite the inherent hazards.
To my knowledge, none of our fifty states allows anyone to build much of anything in known wetlands, but all bets (or regulations) are off with most of those other hazards, bulldinkey.