As the link provided by xor explains, the issue arose because, when Excel was introduced, Lotus 123 was the dominant spreadsheet program and Microsoft was more or less obliged to replicate the bug so as to be able to work with Lotus worksheets and vice-versa. Having done that, later versions of Excel likewise have had to maintain the bug for backwards compatibility. Correcting the bug could cause data loss and/or calculation errors in a wide range of workbooks with severe financial implications. Furthermore, if Microsoft were to correct the 1900 leap-year 'bug' in Excel, that would immediately make it incompatible with every other worksheet program out there, all of which have the same bug and for essentially the same reasons.

You might think Microsoft's reasons are weak - but just look at the furore that's been created by Apple doing something as innocuous as reducing processor performance on devices using old batteries... Somehow, I doubt Microsoft wants to be bankrupted for having the temerity to fix a long-documented, historical, bug that wasn't of its own design.

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Cheers,
Paul Edstein
[Fmr MS MVP - Word]