When SLS was being architected 10+ years ago, I believe the idea was that the RS-25 engines would be cheaper, and there were spares around. Also there were no $1m engines, not even close. Perhaps there might have been a competitor for 1/2 the price, but would that be worth it over an engine that you already have flight ad maintenance experience with? Probably not, it's certainly not a convincing argument.

Lastly there weren't any Methane engines – both of the hottest engines in the market now (pardon the pun) are Methane based, the Raptor and BE-4, but the decision to use Hydrogen as the fuel for SLS was set in stone years ago and unrealistic to change.

Basically there weren't convincingly better options at the time the decision was made, and changing that decision now would mean basically going back to the drawing board on the entire rocket.

The first SLS flights will use available Block II RS-25D engines left over from the shuttle program, and when those run out (and if SLS is still flying) the rocket will switch over to the RS-25E, a cheaper, expendable version.

The F-1 engines used on the first stage of the Saturn V were built to burn Kerosene, and the RS-25 series has no common heritage.

It boils at a lower point than oxygen, so you have to insulate the tanks from each other, it's very.. undense (sparse?) per volume so you need bigger tanks, and it's the smallest molecule that exists and makes leaks and shipping harder.

Methane is slightly less efficient but way easier logistically.