Situated software is software a user makes for themselves to solve their particular problem.
Situated software is often a hack, jury-rigged, duct-taped together.
To an observer all they can see is how ugly the software is: how messy, how insecure.
But to the user who made it to solve their specific problem, it's perfect.
Because the alternative was to have nothing for their use case, and now they have something.
That's an almost infinite difference.
The challenge, and the reason that this didn't actually happen in 2004 when Clay wrote the original essay, is that building software requires talking to computers in a way they understand, and that was hard.