Americans make the mistake because there are major things named Columbia here, including a major river, the C in Washinton, DC, an Ivy League university, a state capitol, the C in CBS, a record label, a movie studio, a space shuttle that tragically exploded, and many more that I'm sure the Wikipedia page lists (I only typed out those I knew of off the top of my head).

The misspelling of the country is a pet peeve of mine as well, but I don't think it's confusing why people make it - they simply think it's spelled the same way as all of the other Columbia's they read about.