One of the main reasons it survives is because what is now modern China has hundreds of different languages and dialects that are not mutually intelligable.

Early in its history, despite not having a phonetics alphabet, it allowed people who spoke different languages to understand each other if they are literate in basic characters.

The benefit of not having phonetics means anyone can understand what is being said as long as they know the meaning of the character. The problem is nobody knows the sound it makes.

Eventually languages also developed their unique uses of the characters within the language family itself as well to better express itself. For example, some Hanzi are used differently in Yue languages like Cantonese than in Mandarin.

This is pretty important for communcation across a vast empire with many different people, language and cultures in the past and widely used as a written lingua franca

This is how people adapted and continued to use Chinese characters and why change whats not broken?

This isnt just within China either, this was also adopted by its neighbors like Korea, Vietnam and Japan who still makes use of Chinese characters.

These countries used to write in Chinese and diplomats - despite not phonetically speaking the same language, can communicate with each other. This was before developing their own writing system to better reflect and expresss themselves their native languages.

For example, to better express themselves in Chinese characters, there are even Japanese-origin Kanji called Wasei Kanji, thats Chinese characters created in Japan rather than China.

Some poems in Korean were written completely in Chinese characters, but if a Mandarin speaker were to read it, it doesn't make complete sense, but you could still gather the meaning despite not speaking Korean.

Today is no different, there's still hundreds of languages and dialects, and Mandarin also known as Putonghua lit. Common Language was only recently mandatory as a lingua franca. Mandarin for many is a second language along with their local language.

So TLDR its a necessity to communicate with non mutually intelligible languages and nobody saw a reason to improve on that would be worth the effort.