Why do Japanese people say Chan after someone's name?

-chan is a name suffix denoting a high degree of familiarity. Most often used with girls who are close friends but younger, also used with small children, when used with a male name denotes an intimate relationship, or can be an implied purgative. Various uses take on many different subtle implications based on context, gender, age, relationship, and purpose.
'Chan' is an honorific, indicating affection and familiarity in general. It's mostly used after names of girls, kids and pets and hardly ever used for adult males, but if used it's often as humor.