Because LLMs don't think, and a mistake implies logic. "Hallucination" is an attempt to differentiate the problem and further emphasize its lack of basis in reality.
Words are inexact abstractions, and meanings change over time. If they can't think, how can they even hallucinate? Remember the old definition of "computer", and how its usage shifted from humans to man-made machines. I just think that "mistake" is a better analogy than "hallucination": It gives a result that does not concur with our shared experience of reality, like shifting signs on a maths exam. The human shifting sign is most probably not hallucinating. The human is making a mistake.