I argue that TeX isn't widely used in nearly all of academia. Microsoft Word is awkwardly common, for what I've seen. The likelihood of TeX use grows with the probability of having to include complex equations into papers. This will emphasize—with perhaps the notable exception of CS—the sciences without the word 'science' in them.
Generally, it's easier to write logically structured text rather than physically structured text. Thus, instead of battling with physical layout people have a subtle incentive to try to let a computer automated some of that work for them in hope for productivity gains. Various text authoring tools and word processors can help with that to some extent.
The differences come into play as different software start cracking broke in different ways. Some people are never able to cross the border to something more complex and powerful and are thus forever limited to pixel-perfecting their MS Word layouts, equations, and formatting—quite complex and powerless in itself! Now, TeX has that power but comes with a steep learning curve and a significant load of archaic baggage. This means that, for people with certain inclination, it will be at some point be easier to battle with TeX than with other typesetting or text authoring programs.
TeX users don't probably drool its unlimited awesomeness. It just means that for many of them TeX is the best known tool for the job. If there ever is an another tool that allows them the power of TeX and yet comes with a good library of facades that shield them from the inevitable ugly innards it will probably win over many people over time. Nobody likes to write HTML/XML and MathML but think something like Markdown with cross-references, TeX-like equations, a good chaptering markup, and you're close.
I'd suspect that TeX is mostly used in academic departments where UNIX has been the de facto operating environment for a long time (e.g. engineering, computer science, mathematics, physics) and there is a well-established "command line" culture. In more Windows-centric departments, MS Word is ubiquitous. If the Equation Editor functionality in Word isn't sufficient to do what you need, then MathType (the professional version, sold separately) is generally adequate to get the job done. If you need more control than what MS Word can offer, then you generally go with InDesign instead.
Generally, it's easier to write logically structured text rather than physically structured text. Thus, instead of battling with physical layout people have a subtle incentive to try to let a computer automated some of that work for them in hope for productivity gains. Various text authoring tools and word processors can help with that to some extent.
The differences come into play as different software start cracking broke in different ways. Some people are never able to cross the border to something more complex and powerful and are thus forever limited to pixel-perfecting their MS Word layouts, equations, and formatting—quite complex and powerless in itself! Now, TeX has that power but comes with a steep learning curve and a significant load of archaic baggage. This means that, for people with certain inclination, it will be at some point be easier to battle with TeX than with other typesetting or text authoring programs.
TeX users don't probably drool its unlimited awesomeness. It just means that for many of them TeX is the best known tool for the job. If there ever is an another tool that allows them the power of TeX and yet comes with a good library of facades that shield them from the inevitable ugly innards it will probably win over many people over time. Nobody likes to write HTML/XML and MathML but think something like Markdown with cross-references, TeX-like equations, a good chaptering markup, and you're close.