This is merely the result of the energy being spread out as it travels. While this effect is fairly universal, there are cases where energy does not spread out. An electrical current in a metal wire is diminished somewhat, but not with the square of the length of the wire. But, it should be fairly obvious why the electric current does not spread out, as it is confined to the surface of the metal wire. Similarly, a beam of light, focused by a convex lens, increases in intensity up to the focal point of the lens, before it disperses at greater distances.
People claiming to have psychic powers have no obvious means of focusing their energy.
Maybe they are accidentally holding up some huge psychic lens in just the right place to focus on some distant civilization. But I think that they are just the victims of wishful thinking.