Why would a state refuse to count mail-in ballots as they came in?

It's up to the states to decide when and how to count them, but there could be several reasons:

1) Some states allow people to vote in person if they change their minds or think their ballot didn't arrive in time.  Obviously, that can't be done if they've already counted their mail-in ballot.

2) Counting ballots has to be done in a controlled setting--with trusted election officials and observers from both political parties.  States might not have the resources to do that for an extended period.

3) States might not want the counts to be leaked the press which could effect turnout.  If people hear that their candidate is winning (or losing) in the mail-in votes, they might not bother to vote.  That isn't good for democracy.

Those are the reasons I can think of off the top of my head; I'm sure there are others.

Knowing that there would be a yuge amount more, they tried to change the rules in some states, but their Republican legislatures denied them.  I would guess that it was so that exactly this sort of thing would happen.  They were not happy with the mass absentee ballot idea to begin with because they know that it would bring out more Democrats.  They wanted the mass hysteria.  They want it to fail, because they do not want this to become normal, and bring out more Democrat votes.

Because that is the law in many states.

Because Republicans in those states wrote laws and sued to make sure they would not be counted until after the election