This is a much larger discussion, akin to most religious wars in software ;-). There is a huge argument for what you're saying, but there's other forces at play. One aspect that plays into it is that C is a really nice layer on top of assembly, and there are a lot of extremely talented embedded C software engineers, (I'm assuming) moreso than the number of available Ada engineers. Also, keep in mind this is a pretty conservative domain. What has worked in the past is trusted much more than what might work better. Up until a decade or so, there was no operating system to speak of and most development used hardware controllers.
Also, C is not the only horse in town. In fact, I hear that Ada is actually pretty popular in space-flight. Other missions have successfully leveraged FORTH even. Using a Lisp read-eval print loop from many millions of miles away once saved the Voyager mission.
In my experience, I have never come across Ada in the spaceflight domain.
Among the big players in spacecraft flight software, there seems to be a divergent east-coast/west-coast preference for C and C++, respectively. In my estimation, this is the reason: there is a wide variety of target hardware and OSes and the need for FSW to be reused across all of them (embedded linux, VxWorks, QNX on PowerPC, SPARC, intel architectures). In terms of development environments and compiler toolchains, only ISO C (and to a slightly lesser degree C++) is supported by all of them.
Edit: Various instruments on spacecraft may be programmed in Forth or other nifty languages, for example, and there's a growing effort to make some of the more "interesting" challenges in spaceflight (autonomy, fault management, guidance-and-control, etc..) to be coded in custom domain-specific languages or other scripting languages like Lua.
Also, C is not the only horse in town. In fact, I hear that Ada is actually pretty popular in space-flight. Other missions have successfully leveraged FORTH even. Using a Lisp read-eval print loop from many millions of miles away once saved the Voyager mission.
One really interesting point of view on this topic is Ron Garret's essay called "Lisping at JPL," available at http://www.flownet.com/gat/jpl-lisp.html .