1) It’s something to do at a party: Until people get really drunk, they are usually way to awkward to socialize with strangers (this is natural). So, people prefer to huddle around a beer pong table with strangers, and play/watch a game that they have no interest in,rather than risk being awkward by talking to someone

2) It doesn’t require much conversation: This sort of goes along with #1, but, people who find conversation strenuous, or find themselves around “friends” they can’t carry on a decent conversation with, generally gravitate to the beer pong table, rather than sit down and enjoy a game of cards or pleasant conversation.

3) Lack of alternatives: You mentioned this in your post. Honestly, I think most college students really aren’t smart enough to come up with better, more engaging drinking games. Those that are smart enough, either don’t have the necessary social leverage to set a new trend in drinking games, or, the more likely case, they choose to spend creative energies on more fulfilling pursuits.

As of now, beer pong serves its purpose, that is, getting socially awkward college students drunk enough to have a decent time at a party…

Would I ever have it at one of my parties though? Probably not.