It's like calling that 9-pin connector on the back of your notebook a DB9 ... it's wrong but so widely practiced that it's become commonplace. It's still wrong, though.

It started out as "in-situ" programming because it allowed the device to be soldered to the board rather than having to be socketed if it needed reprogramming.

People tend to use "system" rather than "situ" because it seems more erudite. This is really important to marketing people and those who actually listen to them. Marketeers don't care if they're right, so long as they're "kewl."
RE