Why do investment banks say they're only looking for rising sophomores and juniors for internships?

They don't. They're looking for rising juniors and seniors (i.e. current sophomores and juniors).

But what about seniors, though? I figure most of them would want an internship before they get a job.

Are you talking about SA positions?

Think about it, either a senior will already have accepted an offer and they would investing in them without the opportunity to get them full time or they don't already have an offer and in that case they don't want something no one else wants. Remember, most big banks are taking on interns to get a good pool from which to hire full time.

Also, if they were to take a senior without a job, their new analyst class is already full and if they extended an offer, they would have to wait until the next year to start. Just doesn't make sense all around.

I think you should do some reading on Mergers and Inquisitions and here before you ask similar questions.