Originally, it was an accepted belief that whenever someone sneezes, the devil or an evil spirit was trying to possess a man or woman. The act of sneezing sort of dispersed the devil or evil spirit.

I remember my eldest sister telling me this when we were kids. And as kids, we usually believe everything we're told without question or doubt especially if it's from someone we look up to. But I do recall reading it from somewhere as well. And so after typing those two sentences, I wanted to find out if my sister managed to pull one over me and googled up sneezing and came upon this: http://en.wikipedia.org/wiki/Bless_you

So there you have it. I'm sure the net is loaded with reasons on how "Bless you" came about ;)

But WHY WE STILL say "Bless you," I suppose it's simply become out of habit.