People play games to escape right? So if someone wants to escape by playing a game and someone else is using cheats to break the game (le. Floats over the map and insta kills any player that spawns) that ruins the gane for those trying to escape, which is a problem. The question is more, why are you playing a game where you need to use cheats to have fun? Why are you paying money to cheat a game when you would clearly suck otherwise? If you are bad at a game, that's ok. Either take your time to learn how to play the game better, of maybe this game isn't for you and you should find a different game that you'd be better and have more fun playing (this is why there are game demos)

The companies do this, because if there are multiple games in the same genre, being know as the one full of cheaters can make players go to your competition instead.

Some players take this seriously because they have nothing else "positive" in their life going on. If you can't get a decent job, or a romantic partner, or save up for a house or retirement, or you have no chance on taking a vacation, at least you can win at something.

There's nothing wrong with video games as a hobby in general, but it should not be your whole life