A: Because
Big Fat University was already taken. Also, we wanted a place where we could spend some time digging deep into the mysteries of the web to find out what it does, what it doesn't do yet, and what it should do soon. And cutting-edge research like that can only happen at an "Institute."
And also, for tax reasons, most of the money we spend can be sheltered a whole lot easier when the taxman looks at your return and sees the word "Institute" instead of "Company" or "Multi- National Conglomerate," or "A Subsidiary of the Rand Corporation."