I think it depends on what classes they are. If you balance difficult classes with not-so-difficult classes then I think it works out for maintaining one's sanity. But those who overload themselves with a courseload that requires massive amounts of studying are being unrealistic and needlessly stressing themselves out. Some people handle stress better than others.
Why do they do it? Most likely pressure to finish school as quickly as possible. You don't see elementary or high school students pushing themselves so hard because it doesn't cost anything to attend (assuming public school). Maybe it's the parents pushing, maybe it's the student, sometimes it's both!
I was lucky in that my parents funded most of my college, however I was keenly aware that they were not rich and the money would run out if I dawdled. I didn't get much pressure from them, probably because I made sure I never had less than 16 units each quarter. I'm sure they would have leaned on me more if I started slacking off. They did frown upon my request for a single dorm room rather than sharing with a roommate.
Anyway, I can see some parents being unreasonably tough. Mine trusted my judgement and sensibility, but not all parents think that way.