Pokemon started, Pikachu became popular, they stuck with it, the end.
Cuteness is subjective, yes not everyone will find Pikachu cute, or will find others cuter, but that's irrelevant, it's a matter of getting the most and Pikachu just happened to get the most love. You may not like Pikachu, others do, a lot of people do and it's became probably the most well known Pokemon, why wouldn't they continue to use it as the mascot.
It's the mascot because that's how it happened, and it'll continue to be the mascot until a significant amount of people start hating it and starts affecting the franchise, which wont ever happen.
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