Because you have to get the materials into orbit to make something free floating. A telescope on the surface of the moon can be built from locally sourced materials - the moon's surface is largely aluminum oxide, and aluminum is an excellent material for mirrors in an environment where there is no air to form an oxide layer to dull it - so instead of having to send up the entire telescope, you just need to send the equipment to build the telescope (which for big telescopes can be quite a lot smaller and lighter).
