Market cap based Indexes make the most sense. If you were to have an index that measures it's price any other way then it would not be able to truly measure the performance of the companies in the index.

If the index used share price (like the DJIA does) then companies that have a high per share price would have a greater effect on the index then a company that has a low per share price, even if both companies are otherwise exactly the same.

Another option would be to have all companies be equally weighed, however this would make it unfeasible to effectively be able to invest in the index as small companies in the index would not have enough shares available.