The problem is that it isn't a good "starting place" for an app. Instead you write something in C/C++ and say "oh, I wish I had a dynamic language for this part" and then you add Lua on top. And this is part of why Lua is such a compelling language now - by being extension-focused it's been able to iterate the entire language many times over and make basic semantic changes without worrying about backwards-compatibility.
But if I start writing an app and want something Lua-like....it ends up being easier to start in Python. There are some good projects out there to address this but it's a question of maturity - as of right now Lua still doesn't really satisfy as a "batteries-included" platform.