Because if they didn't, you'd have to have some other organisation with aviation expertise that did! Honestly, you blokes must live in Disneyland to think scrapping CASA will fix whatever problems you see with Australian aviation as it is.
Because we live in a so-called civilised democracy, things that happen have to be regulated in some way so people just don't do whatever the hell they want, and the paying public have some protection, and there's recourse to the law when things go wrong etc etc.
Whatever organisation ends up being given the role, it's going to be much the same because the industry isn't that big, there's not that many people to choose from when it comes to filling the regulatory jobs, the nature of the industry is such that who you know is at least as important as what you know, so even if you fired everyone in CASA tomorrow it'd be back just the same in a year's time.