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Because it was the kind of music they played at discos in the 1970s. The word disco (short for discotheque) means a dance club where music is played by a DJ instead of a live band. So, the style of music that was played at 1970s discotheques came to be called "Disco Music." Probably because of its association with 1970s disco music, hardly anybody uses the word "disco" or "discotheque" anymore to describe those kinds of dance clubs. Most people just call them "nightclubs" or "dance clubs" now.

You know the movie Saturday Night Fever with John Travolta? That's what a disco was. It was a specific kind of music and dancing, in a specific kind of nightclub with lots of colored lights and disco balls. Sort of like a 1970s version of the raves kids go to today (which also feature a specific kind of music and dancing).

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