As far as I know, most scholars date Sahih Bukhari to 870 AD and they date Sahih Muslim even later placing them at least 230 years late from the events they narrate. Why are they dated so late?
Can I also get a source for the often-cited "Bukhari only picked 7,000 hadith narrations as authentic out of 600,000 hadith narrations"?
They're not dated late. They're dated to the era of their authors, which makes sense. Sahih Bukhari was written by Bukhari, so the earliest it could be dated would be when Bukhari was alive and able to write. Same with Sahih Muslim.
Rephrasing your question to ask what I think you mean to ask, "Why are the most important sources of the Prophet Muhammad's sayings dated to 2.5 centuries after he lived?"
The answer to that question lies at the heart of hadith collections. Hadith were initially not compiled into books. Why would they be? In the early stages, it was oral. People who knew the Prophet Muhammad telling their children/students what they had heard. People might keep notes but they were for personal use. It was only as Islam began expanding outwards that the process of hadith collection formalized. Ibn Shihab az-Zuhri (we're talking early Umayyad period) really began what we would think of as a formal codification of hadith. Hence the early Umayyad period, i.e. a few decades after the passing of the Prophet Muhammad, is when hadith books really became a thing.
Bukhari and Muslim are nowhere close to being the oldest hadith collection. What they are, however, are the most important ones. That has to do with the fact that Bukhari did something unique, he made it a point to put in his book only those hadith which he felt could, with absolutely certainty, be traced back to the Prophet Muhammad. Muslim followed the same idea, only including hadith which he felt were absolutely representative of the Prophet. That is what set those books apart and it is that which has made them so accepted. They are not famous for being the earliest collection of hadith.
The best book which goes into detail about how Bukhari and Muslim came to be regarded as highly as they are is definitely Dr. Jonathan Brown's The Canonization of al-Bukhari and Muslim. He goes into depth about how they achieved the status they did (as well as the challenges and criticisms along the way).