Because you usually start at 3.5" (unfinished square or block) and
finish and 3" after sewing...USUALLY. Of course there are a few patterns
that use the less common 3" but that would finish at 2.5".
When you trim you don't trim all four sides in one go. You trim two
sides, turn and trim the rest. Right? So you position your ruler so
that the 3.5" sides are on the sides of the fabric that you will trim.
Ignore the 3" sides. Does that make sense?
If I were to cut 3.5" square I would use a longer ruler and cut a
3.5" strip and then cut 3.5" the other way.