WHY is ATMOSPHERIC PRESSURE TAKEN AT SEA LEVEL?
It simply relieves people of having to know their exact elevation.
Atmospheric Pressure is related closely to the weight of the air above you. The average weight of a column of air one square inch in area and reaching all the way from the sea to the top of the atmosphere is roughly 14.7 lbs. If you climb or drive up a hill you have less air above you because you are closer to the top of the atmosphere. Therefore the atmospheric pressure actually changes when you go up and down hills or mountains. In order to use atmospheric pressure for weather related reasons, the variation due to the weight of the air above you needs to be considered. Unless you know the elevation above sea level of your present location and can calculate the effect it has on your atmospheric pressure, the local reading would be meaningless.
Barometers are used to measure atmospheric pressure. The dials on barometers are adjustable so that you can match your local reading with that announced by a local weather station, where they have already calibrated their instruments for their known elevation.
Atmospheric Pressure isn't necessarily 'taken' at sea level. It can be taken anywhere. Since sea level is approximately the same all over the world, the reading is adjusted from the pressure at the elevation of where it was taken to what it would read at sea level, just so we all can use the same reference no matter what our elevation actually is.
Atmospheric pressure is 'reported' as mean sea level pressure (MSLP) as a uniform standard.
Atmospheric pressure can be approximated as hydrostatic pressure exerted by the mass of air at the point of measurement. Which means if we measure atmospheric pressure at a higher elevation, we will find lesser pressure (Since the column of air above the point would be smaller or lighter). Similarly, if we measure the atmospheric pressure at a valley or at lower elevation, we will find higher atmospheric pressure, because the column of air exerting pressure at that point would be taller (means more air mass). And hence the need for a standard.
The mean sea level is more or less uniform. The pressure at our locations is simply calibrated to (or corrected for) the elevation difference between our location and mean sea level. That is why the weather reports use MSLP and our domestic barometers just adjust from that level.