Most likely, it's because the concept came first and the name came afterward.
It sounds like you're imagining that some mathematicians were thinking about the English word "smooth," and they were trying to figure out how the word could be mathematically defined, and they decided that it should be defined as "differentiable arbitrarily many times." You're asking why they decided that it should be defined as "differentiable arbitrarily many times" instead of "differentiable (once)."
However, that's almost certainly not what actually happened. Most likely, mathematicians were thinking about the concept of a function that's differentiable arbitrarily many times, and they decided that they wanted to have a single word referring to this concept. They thought about the various words they could use for that concept, and they decided to use the word "smooth."
That's something that happens a lot in mathematics: mathematicians start thinking about a concept, and then they choose an existing English word to name that concept. As a result, a lot of words have meanings in mathematics that are very different from their meanings in everyday English. For example, in everyday English, the words "loop," "ring," and "circle" all mean more or less the same thing, but in mathematical English, these words have very, very different meanings.