Because they already had a partly-completed heavy launch pad (originally meant for a Zenit-2) there--the only one within Russia proper. It was originally an ICBM base, but it's suitable for polar and Molniya launches. Definitely suboptimal for equatorial trajectories--but it was there and the Russians are nothing if not practical.
They're building a new facility in Vostochny, at a much better latitude, but that'll be a few years yet.
"Architect Dmitry Pshenichnikov has stated that the city is to become a "one-of-its-kind scientific and tourist space town with a unique design and a beautiful landscape""
and immediately below
"In November 2012, press reports indicated that the Russian government is having difficulty in finding a good use for the new spaceport, and that other government ministries have been avoiding the project while "calling the project a 'dolgostroy', which is Russian for an endless construction boondoggle"."
I mean Baikonur is bad (yet at least it has a history), but that is much worse. And in the article they do mention some probe by Deputy Prosecutor General - things seem to be as usual in Russia :)
The Vostochny spaceport project was lobbied in government at the time by those guys who helped to draft Roskosmos charter in early 1990's. The implementation can suffer, of course, but there are good reasons behind the idea itself.
