There are two reasons for that:
Diffraction: since the aperture of the telescope is limited a point source is mapped to an image with a little disk surrounded by rings.
Atmosphere also causes distortions: not every part of the aperture has a plumb of air in front of it of equal temperature, and temperature influences density and thus refraction index. The result is that the atmosphere acts as an ever-changing floppy weak bad lens that distorts the image.