The problem is, if you try too hard to mimic the real world example (typewriter in this case), you will end up with some constraints or weird bugs. For example,

The problem is, if you try too hard to mimic the real world example (typewriter in this case), you will end up with some constraints or weird bugs. For example, if the indentation were to be applied on per-line basis, what would happen if you later added some text in the previous line? would just the same amount of words be indented, or would the indented line not change at all, and the excess words pushed to a new line? This is exactly why some things in Word (and other word processors for that matter) are done the way they are done.