The OP is asking why people say this, implying (with indignation) that they don’t have a “good reason” for doing so. Others have noted that no one is under any obligation to satisfy the OP when using commonly accepted expressions in speech, but there is, in fact, a reason for this construction, which is related to Treppenwitz’s observation about a similar construction heard in Southwest England.
First, we should distinguish between the noun clause where we’re at, etc., discussed in the blog mentioned by Kimstu, which is an idiomatic expression, and the actual ***question ***which is bothering the OP so much. As **Johanna **notes, the noun clause where we’re at, etc., is a single, idiomatic lexical unit, and becomes meaningless if you remove the at.
The OP, however, is offended by the actual question, Where is it at?, and believes that it has some kind of faulty deep structure. Actually, it’s not really so different from questions such as:What is that for? (referring to a tool, etc.)
Who is that by? (referring to a song, etc.)and similar questions, which probably the OP him/herself uses.
In this case, the deep structure is like someone saying to you on the phone with a bad signal, “I’m at the market.” You don’t hear the last word, and you could ask for clarification, saying, “What are you at?” However, because location is the key issue, many speakers will substitute the interrogative pronoun what with where, as a kind of emphasis, and say, “Where are you at?” This is syntactically the same as the question, “Where is it at?”
So the issue here is not the use of the word at–which is similar to the examples above that I’d bet even the OP uses–but rather the simple substitution of the interrogative pronoun to emphasize location. Where becomes a token for the place–which functionally is perfectly reasonable and practical.
This aligns with the distinction UltraVires describes, and I would say that it is not just a regional colloquialism, but a broader and more or less standard usage.