What makes alcohol a good conservation product?
Alcohol kills bacteria and fungus, put simply. It does this as its metabolism products cause damage directly to the DNA, and directly to the cell respiration process. It also happens to tend to dry it out.

We can drink alcohol safely because of our alcohol dehydrogenase enzyme, which breaks the toxic alcohol into useful byproducts, that we can use for energy.

Also, it's a matter of scale. Consider submerging yourself in alcohol for a period of time. Don't you think you'd probably die, too? 

It's very important to note that alcohol strength matters in this case. It also depends strongly on type. For example, ethyl alcohol: we drink this kind. It's not as toxic as say, methyl alcohol, or isopropyl alcohol. Those last ones are used as preserving and disinfecting agents, respectively.