Because the price is the same as buying it outright in the long run (assuming you use the newer versions as most do), its at least as good a deal as the outright purchase. For things that create value over the term of ownership, a subscription makes a lot more sense than a large up front cost. We do this model, but with more middlemen & machinations, for just about everything nowadays (houses, cars, student loans, etc.). The only difference is Microsoft isn't screwing you.

The value-add here is that Office comes with cloud storage, really great built-in sync, and a continuous stream of improvement. Amazingly, Office is still getting better, but now improvements are released by the month, not every 3-4 years.

I personally use the home edition for my family. 4 family members have office / 1 TB onedrive with a single yearly subscription which is a fraction of the price I'd pay for a single perpetual license (and I have an extra user license to spare). It feels like a good value for me.

It gets regular updates. There is a version that you can just buy once, but it only gets updates for (I think) a year and then you have to buy a new one whenever you want an update.