I doubt it would have remained as popular if it weren't so versatile, but people were quick to discover that it helps them to feel relaxed and warm. It elevates their mood. It promotes honesty and camaraderie. It has uses in the preparation of great tasting food and flavorful drinks. It works as an analgesic. Low doses help with sleep. Large doses help with trauma and grief. Long before people were doing research on cancer and steatosis people noticed that alcohol made them feel better and it was widely believed that it had a positive impact on their health. People also tended to see it as more of a moral failing when people's lives were ruined by addiction (plenty of people still fall for this trap today).
More recently we gained the ability to look into the long term harms and balance them against additional benefits we might get from alcohol like the antioxidants, the increases in HDL cholesterol, or the decreases in blood sugar, some of which may improve our health, but I suspect that as long as alcohol increases people's likelihood of having fun, dancing, singing, and screwing, it'll probably stay pretty popular.