Obviously, the answer to the literal question in the topic is ‘because that’s tasty’, but as I sit here, eating my dinner, which includes said tasty side dish, I wonder…why are they called that?
They don’t look like scallops, they’re not made with scallops, they don’t taste like scallops…
For some reason, I have always detested scalloped potatoes. Possibly because it was one dish that my mother just couldn’t do well… but I’ve never run into any I liked any better. Glad to know the origin of the name, though.
The term scalloped, as referring to anything to do with food, is cited in the OED in 1737. Scalloped potatoes cited from 1884. What did the term mean to people in byegone days??? Maybe I’ll have time to look later.
So, you’ve got scalloped potatoes cited in English from 1884. What is past is prologue.