Because people are idiots and think some sort of zombie apocalypse is coming where you won't even be able to leave your house. Like, can people really not live without toilet paper? It's not essential. If you had to you could just use an old pair or underwear and rewash it. A lot of people use re-usable/washable nappies for their kids so it's not a big deal. This whole coronavirus thing is just turning me into a bigger misanthrope. It's going to do more damage to the economy than it does to people.
People panicking irrationally is not an exclusive concept to this also being a real threat. You have people panic buying on one hand causing shortages, and on the other there are people with normalcy bias doing nothing and exacerbating the spread creating an inverse self fulfilling prophesy. The hoarding toilet paper is irrational. Not being able to leave your house is also known as quarantine, and is absolutely going to happen all over the globe.
Look at what is happening in Italy. That is going to be the USA by the end of the month. They SHOULD AND HAVE TO do this in order to lessen the pace of the spread, because at this pace the medical system will be totally overwhelmed beyond capacity. It will in fact harm the economy, but it is also going to harm people, especially if emergency services break down, which they very well might. It is easy to write this off now when we aren't even in the first wave yet. Come back here in a month and tell me how wrong I am.