I wouldn't be surprised if a lot of writers were less technically savvy, happiest writing in Word, or simply wouldn't know how to write in any other format. It makes sense from the publishers point of view to pick one format and stick with it, so they have a consistent editing style and ability, and only have to deal with converting one format into a final publication.

I do feel that this is one of those cases where you should be able to write in the way you feel best for you, and if the publisher insist on having the final document in a word format, it should be straightforward to convert your chosen representation to theirs. It's hard to say without knowing precisely how the publisher expects the file to be formatted, but if it's fairly straightforward, there are libraries that will write to doc files for you, or there are open formats that MS Word already knows how to convert into .doc files that you could target instead.