From what I've read it's due to a general idea that stacks use a lot of memory, which limits how many of them can be spawned. It's only good if it scales to a million concurrent users. A million 16 KiB stacks is over 16 GiB.
I think the popularity of event loops stems from the fact Node does it. Pretty much cooperative multitasking by another name. Functions are coroutines, return is yield and the event loop is the scheduler.
There are many shortcomings in the API, especially missing timeouts everywhere. It was clearly designed by people working on the compiler and other local tools, and not much network services, but I think it's a great improvement in the Zig ecosystem and hopefully people can now write reusable libraries.