In most racing games (Mario Kart, Sega Rally, F-Zero, etc.), racers typically make some number of laps in a closed circuit. The most notable exceptions that come to mind are all arcade games, or arguably not even a racing game (Trackmania, OutRun, the Cruis'n series). Why would a designer want to build tracks as closed loops, and why is it so commonplace?
I'm not sure about your assertion of "most" - many games like GT, DriveClub, etc, have many point-to-point races...
But there are two reasons to this:
Firstly, many real-life races are lap-based on closed circuits (Formula 1, Nascar, etc), so gameplayers might expect this as a standard.
Secondly, and from a game design point of view, putting multiple laps on a closed circuit means you can multiply the game time for less game design (a 4 lap race on a 1 mile circuit means only 1 mile of track and environment design - a 4 mile point-to-point means 4 miles of track and environment design).
From a design point of view, it's advantageous for new players to learn the placement of powerups, dangers and other landmarks on the track in the first lap so they can focus more on gameplay for the remainder of the game.
The sooner the player can get through the learning phase of the game, the sooner they can start mastering the other aspects of the game.
As Bushnell's Law states: "All the best games are easy to learn and difficult to master."
In racing games, going as fast as possible is only part of the game. It would not be as interesting to race against a timer. Loops force interaction between players, as even those that are far ahead are near the others. Loops allow multiple chances to cut each other off, or to use power-ups against opponents. As an example, the banana peel item would have much more limited use on a point to point race.
A couple answers already covered the design aspect of it pretty well (more stuff = more work).
Something that hasn't really been brought up yet is how laps measure skill. Someone did mention that it is an "endurance" sport for professional racing. This is a pretty big factor in real life; no so much video games.
The other skilled aspect of the lap system is what is important. Determining relative skill is extremely complicated. There are so many active variables that the skills between two close opponents are often not the only factor in determining victory. A big factor is variance. Not everyone is going to have their best race every time. A lap system gives a better measure of consistency by testing performance on the same track multiple times in one race.
It's like doing an measurement 3 times instead of 1 to make sure you have accurate values.