Hi,
The Dialogue System started life as a Unity front-end for a third party authoring tool called
Chat Mapper. Chat Mapper uses Lua because:
1. It's a popular language that's familiar to many modders and game developers, and is one of the easier languages to learn, and
2. It's easy to integrate into existing engines.
When Chat Mapper was designed, Lua was the de facto standard for this type of scripting interface. It's still widely used and in fact might still be the most commonly-used modding language.
So when the Dialogue System was designed, there was really no choice. In order to support Chat Mapper, it had to support Lua. Some devs use the Dialogue System's Lua environment very extensively, even exposing it as an in-game dev console and as a player modding interface that ties into their own C# code. Most, however, never touch a single character of Lua and instead just use the Dialogue System's dropdown to automatically generate Lua statements.