However, giving you a short answer, we use Lua mainly because it's easy both to extend and to embed. It's implemented as an almost "freestanding" C library. Moreover, it has a considerable small footprint (~250 KB) in comparison to other scripting languages (e.g., Python has a few MB). Moreover, Lua has automatic memory management, fully isolated execution states, protected calls, among other features.
Maybe. Debatable. But the point was more that “replace all userspace [and kernelspace] with X” is the raison d'être of many Forths. So many classic Forth systems boot into a Forth environment, extended in Forth by the programmer-user. If that's what he's looking for, there's 55 years of Forth history to delve into.