We use 120 volts because Edison chose 110 volts DC for light bulbs. And that was because he couldn't figure out how to create bulbs running on 220 volts without burning out .
So the question really is, why doesn't Europe and the rest of the world use 120v?
Originally Europe was 120 V too, just like Japan and the US today. But in the 50's or 60's they were able to change to 220 V. It's an advantage because with increased voltage you get more power with less losses and voltage drop from the same copper wire diameter.
At the time the US also wanted to change but because of the cost involved to replace all electric appliances, they decided not to. The average US household already had a fridge, a washing-machine, etc., but not in Europe.