Why is Satanism called Satanism?

The etymology doesn't say anything about worship or belief, per se. The -ism simple means a set of practices or beliefs. Playing drums the way Buddy Rich did could be called Buddyism. The Travis Barkerists would stage a coup.

If you're taking the mythology literally, then yes, it's kinda odd or maybe even sarcastic. But I'd argue that no religion was meant to be taken literally. Is there really an lonely, misunderstood red angel with a pitch fork living in the earth? Not likely. But is there room for a person who didn't follow all the rules of the Abrahamic religions and got shut out and now wants to embrace the worldly stuff? Of course.

Satanism is an -ism around the idea of Satan. Of course it doesn't worship Satan as a person or thing. LeVay used Satan as it is, the opposite of god. He's described it as an entreat into the primal rather than spiritual.

Because Satan is seen as the counterpart to God thus the symbol of what Christianity is not. If you look at the key ideas of Satanism you will find that they are often opposed to the supposed values of Christianity for example, "vengeance instead of turning the cheek".

I think for A.L. Satan was a symbol of rebellion against all authority.

A quote from the Satanic Bible says "He who says "Thou Shalt" to me is my mortal foe."

Because he thought it could get him some cheap publicity. It worked.