Because, of course they are. Cue the shrieks of teen girls/weird middle-aged women/sexually-confused teen boys everywhere.
The insanely popular British boy band (the rabid tween girl fan frenzy they inspire has not been seen since boy band dinosaurs Backstreet Boys, et al roamed the earth) already made a movie ("This is Us"), so a reality show is the natural next step. (There is nothing natural about reality shows.)
Plus, much like the new societal rules that dictate that if you don't Instagram your food, you never ate it; if you don't post photos of you having fun, you never had any; and if you don't tweet about it, you didn't know about it, at this point in the game if you're a semi-famous human and you don't have a reality show about all the dumb, human crap you do every day you might not even exist. And the boys of One Direction are more than semi-famous humans. And, fine, they're fairly photogenic humans.
Also, they gave The Wanted their own reality show, and apparently people watch that, and I don't even know who The Wanted are. (They're another British Boy band who, I guess, are like the O-Town to One Direction's NSYNC.)
Details about the yet-to-be-confirmed new show are still in the works, according to UK rag The Daily Star, but you can bet that, if the price is right, this thing will happen.