Why is I am on the bus used to refer to being in the bus.

Prepositions aren't logical. They sound like they could be, but they are chockablock with exceptions due to convention. Sometimes the preposition exists the way it does due to the history of the word it compliments. My understanding is that bussess used to be different. Once upon a time, a bus was a horse and cart - it was open topped and you got on the cart called an omnibus or a horsebus. My partner has a picture of one of these because her family used to operate one. Then they changed and became combustion vehicles - but for a long time they were things you could hop on and off. There was often an entrance on the back which you stepped up onto - and there were (and still are) unroofed upstairs areas to sit. Also - public transport most often uses the "on" preposition. Its - "on the bus", "on the train", "on the tram" and "on the train". The only exception is "in the car" or "in the taxi" - though I guess those are vehicles in general rather than public transport. Like I said - prepositions are not logical.

I can't say I know if there's a solid reason, but as rule of thumb if you can stand up in the vehicle you're "on" it. If you need to sit then you're "in" it. So you're in a car or in a taxi, but you're on a train or on a bus or on a plane.

if it’s big enough to walk around in, you say “on” (bus, boat, plane, etc) and if it’s not you say “in” (like in a car, truck, etc) I don’t know if that’s the actual rule/reason or just a way of remembering, so someone please fact check me if I’m wrong

I think the tetm bus comes from omnibus ,these were horse drawn carriages originally that you would definitely be on rather than in.

"On" is used for surfaces and larger spaces where movement is possible. 

Buses, trains and planes were all originally vehicles that one sat on, rather than in. Nothing to do with ‘mysterious English prepositions’.

On the plane, on the train, on the boat, on the ship, on a bike, on a go-kart, on a horse .... But "in the car." No particular reason, just custom. "On the car" is very clearly on top of, like up on its roof. That's where I last saw my briefcase or coffee cup. It's just the way it is. Learning prepositions in a foreign language, you will find many exceptions and oddities.

Well. You can actually say "I am in the bus" and "I am on the bus" because both mean "You are inside of the bus. But the difference is what you emphasise.

…because that’s how it is…

I'd say I hear "in" and "on" used somewhat interchangeably for large vehicles that you are physically inside of. [Michigan, USA] But only "in" for a personal car, and only "on" for a bicycle or the top deck of a boat.

It depends whether we consider it a container, surface, or location. This tends to be by size, small container you can't really move around in, like a car, is 'in'. A surface can be enclosed but you can move around, and becomes 'on, a bus, plane, train, boat. A location is often larger still, and 'at' is used, train station, airport, shopping mall. Once you're at a location it can become a container. "Hi, I'm at the mall, in the department store.'

I believe that the rule is that it's 'on' for transport, but if you're in a small enclosed space, it's 'in'. E.g. 'IN a lift/car'

We actually use "on" for most vehicles and modes of transport. "In" is generally only reserved for cars. If there is a rule, I think it's that we use "on" for anything large enough to stand up inside (or that isn't enclosed, like a bicycle) and "in" for anything else.

Prepositions are weird in every language.

If I had to try and come up with reasoning for it, it'd be that a bus doesn't feel like a container you get in (like say, a car or a submarine). It has a flat floor, you step onto it like a platform.  I guess I'd say it's because a bus feels like it has its own ground. Same with a plane, you say you're on a plane. And you stand on ground. Whereas with, say, a car, it doesn't really feel like it has proper ground, it's smaller, it's something you have to get 'in'. 

One thing I’ve heard that I think helped me understand better than “it just is,” was: if you enter the vehicle (bus, boat, train, car, plane) by walking, THEN sit, you’re “on” the thing. If you enter the vehicle by sitting down, like you would getting into a car, you’re “in” the vehicle. And then the only real caveat for “immediately sitting” = “in” are non-enclosed vehicles, like a bike, a moped, a skidoo. Those are all “on,” like you’re sitting on a stool (that just happens to move)

If it makes you feel any better, OP, a late, famous American comedian had a joke about this quirk of the English language: https://youtu.be/QxlE32ikHzo?feature=shared

Things you are *aboard* usually use the word “on” to refer to your relationship with them. You wouldn’t really say, for instance, “I’m aboard this Nissan Ultima,” not seriously, anyway. So, the concept doesn’t apply to vehicles like cars, motorcycles, or rickshaw. You are aboard a bus, plane, train, ship, boat, trolley, or subway. Interestingly, it occurs to me, depending on context, people will use both to refer to submarines, but the context in which this happens is so subtle that I think it’d go beyond the original post to explore it. In most contexts, you’d likely say “on” a submarine (but I don’t think it’d raise any eyebrows to say “in”). But, as a general guideline, if you could say you’re “aboard” it, you would generally also say you’re *on* it as opposed to *in* it.

My hunch tells me it comes from "on a horse", then we generalized it to every vehicle. As general when you are riding a vehicle you can say you are on that vehicle regardless of how you are attached to the vehicle. I can think of move vehicles that you go in which use "on" than I can think of that use "in". Perhaps it's personal vehicles that use "in".

Because it does. Don't question anything and just accept the mysterious ways of English prepositions.

Because you ain’t on top of it.