One middle ground is libraries like SpreadsheetGear that give you a UI that has an almost perfect excel look and feel while giving you more control. You don't need to integrate your tool in Excel, you can integrate a quasi-Excel in your (.net) tool.
I don't even have excel installed on my windows desktops anymore. A 50 dollar tool from an upstart programmer is better for me than excel.
Let me give you a practical example I ran last week. I want to construct a portfolio of loans starting with an existing portfolio, such that it follow a certain total balance and maturity profile through time, by replenishing it every month with new loans of various maturity (I am solving for the individual notionals of these new loans).
So inputs are
1. the existing portfolio, hundreds of entries with various parameters: start, end, notional, etc
2. the target maturity profile at every point in time
3. the target balance of the portfolio at every point in time
A simple LINQ query won't do. For the example above, you want to model it in C#, but the inputs are lots of tables. In that case I find the optimal way is for the script to accept spreadsheets as input files (wrote a "xlsx (de)serialiser") and output files. Effectively Excel becomes the UI of the script. Nothing beats the Excel UX in giving you the ability to build a table, change or copy/paste data in bulk, etc.
If it were too big (probably not if Excel can handle it) I could also just load up the data into memory via a TSV/CSV deserializer, of which there are a few for .NET. If it comes as excel from the source, excel extraction is a piece of cake these days (the codebase I work on takes excel as raw input for data feeds).
As for nothing else letting you build/change/copy/paste data into a table, Sublime Text Advanced CSV package is fantastic for editing tabular data, and Sublime Text has no problem handling files many gigabytes in size.
Instead of doing one model, you may now be able to do a time series of models, or calculate The VaR (Value at Risk).
There is no end to what people can ask from data. The only limitations are technological. And whatever extension you may have, your users will always push Excel to its limits.