Waves can propagate in an inelastic medium, and the fall of dominoes is a wave. So when people say that a wave can't travel in a non-elastic medium can't, this statement applies to particular kind of waves.
When talking about waves one often means perturbations that are periodic in space and periodic in time at every point. This is not the case in an inelastic medium, where due to damping, such a wave would decay.
Yet, for the case of dominoes such terms as solitary wave, shock wave or soliton could be quite appropriate - the kind of single "waves" associated with explosions, tsunami, propagation of cracks, etc.