You're missing the point that the users don't want an application. They want to go off on flights of fancy altering the "solution" as they see fit. Excel lets them do whatever crazy thing they want without constraints. Having a database-backed application is exactly what they don't want because they can't be "creative" with it.

I agree with you, BTW, but I've never seen moving Excel sheets to an application work in practice. You can do it, and it just creates more Excel sheets.