The same reason people don't just write in assembly (or more accuratley, C) to write a desktop application very often. Javascript is the assembly language of the web.
That analogy breaks down though. JavaScript is just as much of a high-level language as most of the things that are compiling to it. Most of the time the reason people don't just write in JavaScript is because they don't like it's _style_, rather then with C or assembly, where the goal is to work at a higher level to avoid writing boilerplate and managing things are are unnecessary.
It doesn't break down entirely though. Imagine we were all restricted to C++ for writing desktop software (although that's nonsensical, it's the case with JS and the web) - wouldn't it be reasonable to start developing other languages that compile to C++?
I agree with you esp. when it comes to GWT - going from Java to JavaScript is going from a terrible language to an ok one. There are two reasons why it has become popular:
Java programmers don't want to learn JavaScript
It comes with good UI building tools
If GWT didn't have good UI building tools, Java programmers wouldn't have any excuse not to learn JS and program normal web applications. But here's a tool that lets them use their existing Java knowledge to build halfway decent web GUIs.
This is just another example of how technologies are chosen by considerations other than objective technical merits.
