While the other answers (and rant) give some insight into probable reasons and feelings arousing on the topic, I think that the main reason is missing.
The Catalonian Government (Generalitat) knows that for now they have almost no options to legally claim indepence -or get the financial rights of the Basque Country & Navarra, I'm not really sure about their original intentions- nor get the majoritary parties in the Spanish Parliament to modify the constitution in order to make the referendum legal. Even the socialists (PSOE), who want to change the territorial model of Spain, don't agree on the referendum. While we will probably see changes in the territorial model, it will take at least several years until Spain gets fully federal.
The only way to exercise pressure on the Spanish Government is gathering international support and attention.
They already made in 2014 an illegal, non binding referendum -with a similar turnout and results as in this one- during which the Spanish Government didn't react at all besides fining some politicians. Mariano Rajoy didn't even call the Generalitat to discuss their financial claims after it. An illegal, non binding referendum didn't work, so what is the next step? Escalation. An illegal binding referendum. Even if not recognized by any law or country, the headline "Independent Catalonia" would get more attention than the last one and would force the Spanish Governement to discuss with the Generalitat.
Here comes into play the reaction of the Spanish Goverment. How do you lessen the impact of such a referendum, so it is not only illegal but also looks illegitimate in the eyes of international observers? Make the votation itself look invalid for outsiders. For that you need
- Small participation
- No guarantees (no urns, no international observers, no other institutions involved besides the organizing one, voting holds place outside of buildings)
Furthermore, the Spanish Government couldn't allow for a second referendum which openly defies the existing law to happen without intervention.
The most radical solution, suspending Catalonias autonomy, is truly a Pandora's box which neither PP (governing party) nor PSOE wants to open.
The task of the Spanish police has never been to stop people from voting by force, shooting elderly people or similar stuff you read in both tabloids and some allegedly serious media. Their aim were the polling stations and urns. Closed polling stations mean less votes and no urns means no election. Closing the polling station where the Catalan President has to vote means no photo of Puigdemont voting (if they don't change the rules so anyone can vote anywhere, like they did one hour before the referendum started).
A referendum with 15% votes, no urns and no photos of politicians voting couldn't be used by the Generalitat to put pressure on the Spanish Government. If the police had closed the polling stations, the violent ones would be the people trying to enter. This would legitimate the Spanish Government even more.
The Mossos (Catalonian police under the orders of the Generalitat, only temporarely and since some weeks coordinated by the Spanish Government) should have closed all polling stations at 6a.m. (only a very small amount had been occupied the days/night before). The Guardia Civil (GC) and Policia Nacional (CPN) would only have to help them were needed.
Almost all Mossos didn't perform their duties, so that the GC and CPN were left with the task of closing polling stations, meanwhile filled with people, and requising urns. Pushed by their political officers the police "just did their job", which sometimes means using force to stop people from "obstructing justice". Obviously, no one gave the urns away without "pacific resistance". The results are what everyone has seen.
While the protests itself and police actuation were far less violent than similar ones since the 15-M (beginning of a new political movement in Spain, 2011), using "riots" police and expecting no people hurt nor cover photos for the international press has backfired horribly.
Next steps? I think Mariano Rajoy won't do anything, so Puigdemont will have to declare independence. Not even the previous Catalan President, Artur Mas, believes the voting of 43% of the population is enough to legitimate the secession, but now they have images to show how they're being "repressed" by the Central Government.