Why do people deploy MEV bots on chain?

To actually answer the question, you'd need to define what MEV is. If we're talking about frontrunning, sandwich attacks and other 'do-something-related-to-pending-transactions' actions, then these actions CANNOT be executed by a smart contract alone. They aren't aware of the mempool, an external transaction cannot be sandwiched between two actions performed by a contract in a single transaction, and they cannot fire up transactions automatically. If you're referring to something you saw on a youtube video like this one (if it's still available when you read this), then those are trying to scam you.

Now, does that mean that MEV bots never use smart contracts? Not at all. See, smart contracts have that interesting property that they can do things EOAs can't do. Mainly, interacting with multiple smart contracts in a single transaction, or reverting/cancelling multiple already taken actions based on another actions result (you can actually do that, using flashbot bundles, but they're more expensive than standard transactions).

In practice, most MEV bots would run on a combination of off-chain code (that contains the actual business logic, finds the profit opportunities, initiates the transactions, etc.) and a very simple smart contract that would look like something like this :

contract Multicall { function runMulticall( address[] calldata targets, bytes[] calldata datas, uint[] calldata values, bool[] calldata reverts) external payable { for(uint i; i < targets.lenght, ++i) { (bool success,) = targets[i].call(datas[i]){value: values[i]}; if(reverts[i] == true) { require(success, "Key transaction failed"); } } } } 

This contracts purpose is only to forward an arbitrary number of arbitrary calls to arbitrary targets, taking advantage of the fact that doing this through a contract is less expensive than doing it through bundles.