Because prior to the 1500's folks weren't quite sure how big the world was, where all the land masses were, and there was a big debate as to whether the world was flat or round. By the middle of the 1500's things had calmed down a bit and there had been enough advances in exploration, mapping and navigation to create the general recognition that the world was round, but that not all the land was connected. Magellan conclusively proved it when one of his ships made it back to Spain after circumnavigating the globe in 1522. So, you then needed a way to verbally describe to people who were geographically illiterate (remember, most people couldn't read nor write) regarding these strange unconnected foreign lands that could not be reached on foot. They could only be reached by traveling over the sea, and so such foreign lands became the lands over-the-sea or, overseas.