Because 24 hour train service is a massive convince that reduces car dependence and drunk driving.

Why does Shanghai metro shut down at 11pm? So early. Impossible to have a fun night out.

In nyc they have multiple tunnels for the same line, so one can be maintained while the other is active. Cities that shut down their metro do their maintenance then, because their lines don’t have a backup track.

Not sure about Shanghai, but in most countries there are (generous) time limits associated with fares, measured from first entry. Obviously this isn't enforced "in flight", but the gate will not let you out when you try to leave and you'll need to explain to staff why you've just spent 4 hours traveling one stop -- since odds are you actually went somewhere else and jumped the turnstile both ways.

I don't think there is a limit in Shanghai. A few years back there was a heat wave and the subway stations were full of people who just came to hang out where there was air conditioning.

Jumping the turnstile is... not common.

Shanghai subway closing at 11pm or earlier is a huge inconvenience, especially for destinations on Pudong side where distances between locations are quite big. It is generally a big (positive) deal when a subway announces it can do late night services.