Because in most matrix displays (if this is the type we're talking about), you are only lighting up one row at a time...just like a CRT display. You don't/can't light up the whole screen at once, you scan the CRT, one line at a time, until the whole screen is scanned (the persistence of the phosphor 'holds' the picture), then you start over and scan the whole thing again.
If you do it fast enough, your eyes don't know the difference and you don't need nearly as many lines (and nearly as much hardware) to drive a display as you would if you tried to light every LED individually all at the same time.
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