I don't know for sure, but I'm guessing that (a) some designers thought that people liked reading with narrow columns (this is the same reason newspapers use narrow columns, and many magazines and paper proceeding styles use double column mode), and/or (b) this way when you drop down the notification list, it doesn't block the contents on the left.
Not that I agree with these reasons, myself. I would much prefer a much wider column as well, and I wish it was adjustable as a user preference.... all I can say is "send feedback"; the designers don't believe us engineers when we complain internally, because "engineers are different". They need to hear from many, many "real users" --- people like me don't count.
P.S. It should theoretically be possible to adjust the CSS via a chrome extension.... and if such an extension gets highly popular, since it requires the very intrusive "this extension will get to look at everything that you browse", that might be a signal that the designers would be willing listen to.