Because their presence indicates that the water is polluted with faecal matter and, consequently, there is danger of contamination with pathogenic microorganisms.
Unfortunately, some coliforms have been found free-living so this may change soon as they may now only indicate that there's been soil contamination in the water as opposed to faecal.
A biological pathogen is any organism, such as a bacteria, virus, protozoa, or parasite, that causes a disease. Biological pathogens are commonly called “germs.” There are many different possible pathogens. It is not possible to test for every type of pathogen in every water sample, so water systems use indicators instead.
Water systems test for indicator organisms, like coliforms, to check for possible contamination by biological pathogens. Most coliforms are not harmful, but they come from the same sources as other bacteria and organisms that could make you sick