- they're moving "legacy" infrastructure off EC2 or similar onto Kubernetes and their service discovery stack is already in place. They end up bypassing cluster IPs and dealing directly with pod IPs. - they're starting with Istio or something similar from the get go because the native service discovery is hard to grok and leaves out a lot of the nice things that Istio gets you for free (once you've set it up)
There's lots of overlap, but I've not heard of anyone making a strong argument for the native service discovery.