Why is VHF still used?
The reason radios in general are used is covered in this question Why is radio communication still used? 

As for why VHF is the band of choice its largely because its assigned for aviation use and the the radio spectrum is not unlimited. Here in the US the FCC regulates which bands are for what, you can find the full list here and you will see that many of them are in use for lots of different things so using a higher (or lower) band for aviation may not be possible as they are likely used for something else.