As far as I have always understood this, it is completely possible and common for $N$ to not be contained in $U$ at all. So, it would not make sense to mod out by $N$. But, taking $UN$ first, will be the smallest subgroup that contains both $U$ and $N$, which then gives us what we need to make sense of the quotient.
Moreover, the second Isomorphism theorem gives us that $UN/N \cong U/(U\cap N)$.