We can assume they paid their taxes when they received their paychecks. Why should their heirs pay them again?
For the same reason why when I pay my plumber out of money I have that was already taxed, he has to pay taxes on it as well.
Money is usually taxed when it changes hands. Now I'll admit in case of estates it's not really practical because there are so many ways to get around it, and it also makes stupid situations happen, like if a parent wants to help an adult child pay for an expense they have, they are limited to the ~$14,000 a year gift limit without the kid being taxed as well.
So I admit it's a stupid law, but saying it's already been taxed is not a good argument against it in my opinion.
You could always loan them the money and forgive $14,000 a year then state in the will that you forgive the rest of the debt upon your death. or just set up a trust and make your heir the executor. There are so many ways around the inheritance tax.
!07/11 PDP a ni deppart m'I !pleH