Because it works very well - it's very accurate, not too difficult to shoot, and quite capable when placed right. (The "placed right" part is essential with any defensive handgun, of course.) A number of really well-designed guns are chambered in it.
Power is not everything - I have yet to work on a shooting with a magnum in which a .38 Special would not have sufficed, nor yet seen a failure with a .38 Special that would have been cured by using a magnum. I know that such exist, but they're not at all ordinary. Reading about hunting I've come to realize that what magnums seem to buy a person is range, which is almost never a concern with defensive handgun usage.
The marketing boys will forever try to sell us on higher-speed/lower-drag "improvements," but what's quietly worked for a century continues to do so.