Because Signal is virtually unknown here. Telegram has a small, but growing following. I'm aware that Telegram uses homegrown encryption which is not ideal.
In the same way that FB, Whatsapp, and pretty much every other app works. I doubt there are any chat apps that don't encrypt between the client and server.
IMHO, it is NOT encrypted, unless the service provider (also can't read your message). A promise from a Russian based company (the Facebook of Russia) doesn't put any assurances for me.
We can't just assign new definitions to encryption. It's encrypted in such a way that a person watching the wire can't see the contents of the message. If you don't want the message on the server, use a secret e2e chat. They are very up front and clear on this matter.
For the vast majority of my messages, I'm fine with them living on their servers. If I need to send credentials to my family, I can use an e2e channel. For me, it's a step up from hangouts and definitely better than whatsapp or facebook messenger.