Excel is as ubiquitous as it is because the mental model of a spreadsheet is very simple and easy to wrap one's brain around. Here's a grid of cells, type stuff into them. Boom, you're an Excel user. (It can do a lot more than that, of course, but many many many people never realize that and still get lots of value out of it. Which is kind of remarkable, really.)
Proper databases are much more powerful, but none of them present the user with an interface whose basic metaphors are as immediately obvious as Excel's. You have to learn about tables, data types, relations, etc. to get anything done in them. Most of that stuff comes up with Excel too, but you don't need to know it to get started. The Excel user's first baby steps are much smaller than the database user's are.
Given a choice between a flawed tool that's immediately understandable and a perfect tool that requires learning, people will always choose the flawed-but-understandable tool. So they go with Excel.