The short answer is that because Plato said so.

The longer answer is that there are really two Atlantises: one, a smallish city-state described by Plato in the Critias, which was a technological, political and military powerhouse, and maybe might have been based on a real city destroyed by a volcanic eruption on the island of Santorini, but might also just have been a traveler’s tale spun into a useful political allegory.

The other Atlantis, widely popularized during the late 19th and early 20th century by Helena Blavatsky and the Theosophists… and especially by the trance-visions of Edgar Cayce, was a globe-spanning civilization that existed thousands of years before our first written history and destroyed itself with weapons of mass destruction. (Cayce said these were based on some kind of solar energy; one of the interesting things about Cayce is that he wrote about this stuff before the first atom bomb was dropped.) The Theosophical/Caycean Atlantis gets credited for everything from ancient Egyptian and Mayan airplane models to Hindu legends of flying cars. The whole point of this Atlantis is to be a technologically advanced society that was absolutely erased. (If you’re a geek like me, this is also notable for being an inspiration for Tolkien’s stories about Numenor, an island that sank due to the pride of its leader.)