[unixbeard]

Lua is significantly faster than most dynamic languages (LuaJIT is faster than most static languages as well), and the Lua runtime is small, portable, flexible and easily embeddable. Creating a runtime from scratch with these properties would be difficult, while targeting Lua makes it nearly free.

Many languages compile to an intermediate format of some kind. The complexities you cite are easily be hidden. MoonScript already makes compiling and error traceback invisible, and I expect direct debugging of MoonScript files will be doable at some point as well.

This is the first I've heard of MoonScript, but I've long wondered why more languages don't use Lua as a target.