Because the entire French army was shattered after Dunkirk. Planning a hasty line of defense at Brittany might have held that small patch of French territory for a few weeks at most, before the German army smashed through that too.
As for the offer of including France in the United Kingdom, France had little to gain from it, and had it gone forward, it would have been an entirely symbolic measure, as there is still the slight matter of the German Army occupying all of France.
De Gaulle and Reynaud were planning a redoubt before Dunkirk. And yes, the incorporation of France into the UK would have been entirely symbolic, but a symbol was what the French people needed at that point. It would have been a sign that the British weren't abandoning them, that they considered them brothers and equals, and would be back to save them.
While such a redoubt would have only enabled mainland France to hold out for a few more weeks, you're forgetting that a France that doesn't surrender is a France with a fleet on the British side, as opposed to neutral and potentially hostile, then destroyed. That fleet would enable the French to establish an absolutely impregnable defence of North Africa and the empire in general, which, combined with the forces of Britain, fighting co-ordinated battles with De Gaulle, who few would argue wasn't a brilliant man in command, could have kicked Rommel out of North Africa much quicker. Knowing their government had never surrendered, the French people would likely have resisted even harder.
I've already mentioned the wild card of the US. The longer France holds out, the more time Churchill and Reynaud have to lobby for US intervention. One major reason the US stayed out of the war and Roosevelt despised De Gaulle was because he stupidly admired Petain, and felt he was the best chance for France's survival.
To conclude, you haven't given a single reason why France had to surrender, and I've given quite a few as to why she not only didn't have to, but shouldn't have done so. Losing an army is no reason to surrender. Losing your homeland is no reason to surrender. If you can't possibly win, then surrender is preferable to annihilation, but France could have won. If you consider De Gaulle Reynaud's rightful successor, then in a way it did, albeit much later than it should have.
