Permissions determine which menu items you see in SharePoint.
So what does this permissions stuff mean when you get down to it? For one, the SharePoint menu for the file will look different depending on which group someone is in. Notice how the View in Web Browser command is available for all groups. But also notice how the Visitors and Viewers do not have the Edit in Microsoft Office Excel command as an option. This is how the SharePoint site prevents people from editing the file. If you don't have permission to edit, then the command won't be available to you.