Why did the founders establish a confederate system upon declaring independence?

Because they beleived it is impossible to organized all states from a central government. They believed they're too big

Explanation:

Under the Confederate system, the states that exist in this country was given with their own autonomy. But, all of them must come and discuss matters together regarding specific issues (such as national defense, taxation,etc)

The weakness in this stem is that the central government that oversee states cooperation do not have authority over the states. This means that if a state wanted to openly violate their duties or agreement, the central government can't really do anything about it.

But the founders did not have any experience in conducting a federal system and they did not wanted to turn into Monarchy.  So they sticked with the confederate system until it's changed after the civil war.