Stereo means spatial; it does not define the number of channels. Most people have probably only used the word with reference to two-channel sound systems, hence the false association. Dolby Digital is also stereophonic, in fact it's much more stereo than your usual two-channel system, as it conveys more detailed spatial information.

In other fields besides audio technology, the word seems to retain its proper meaning. See e.g. stereo-chemistry.

lj mentioned stereograms which may derive from the 'wrong' meaning, as they are composed of two images. However, the point of a stereogram is to produce a sense of 3-dimensional space, so the proper meaning still applies.

In fact, it is sometimes argued that two channels (both visual and auditory) ought to be enough for anybody who has two eyes and two ears. In the special cases where this does work (e.g. good headphones), we might say that stereo == two channels.