Re: They are creating a database ...
I think the reasoning is like this: in a spreadsheet, the user can see where everything is, and navigate it easily - it's just a virtual grid of pigeon holes. If you can navigate yourself K3 or whatever, and know how to reference sets of row or columns, it's all easy, and the mental model is clear and simple.
However, who know what goes on in a "database"?-- anyone who prefers a spreadsheet probably doesn't, and very likely doesn't want to know either. Here the mental model is probably something like handing your stuff to a cloakroom attendant who puts it away where you can't see, and you can only do things by learning some weird query language which you will probably keep forgetting, and then have to export as a spreadsheet anyway -- again with some command or other -- to send to other people. Perhaps such misconceptions can be changed, but will it be easy?
Still, perhaps if this auto-mangling of spreadsheets gets more profile then attitudes could shift. Then again, IT stuff does weird incomprehensible shit all the time and ordinary people learn to shrug, adapt, and cope - more or less - with that. :-)