Because we don't want to attract people to a job becuase of the money it pays. Public service is supposed to be something you want to do because of it's inherent traits, not for the money. During the Constitutional Convention, we nearly ended up not paying members at all, but it was finally argued that you had to compensate people somewhat for their work, and to make it so that some people who would want to enter public service, actually could.
174k a year is a LOT of money, and it's a lot higher than the medium income in America.
I'd actually say move it the other way, pay congressional members ~50k a year, which is more than fair, and also make it illegal for them to perform insider trading. We need to make money less involved in politics, not more.