Memory efficiency just for one. For most programs, and especially in the embedded space, 64b systems carry around (and process) a lot more zeros than 32b systems do. You can still do 64b math when you need it, but you don’t have to pay for it when you don’t.
Given that software is always too big, this can often be a product-making distinction.
32 bit is still very common for smaller CPUs that aren't in the "application processor" class.
They are cheaper because they use less area, and they're also more memory efficient because pointers are all half as big. On these CPUs you don't have 4GB of RAM so you don't need a big address space.
It's good enough for the majority of use cases and systems; even an eight bit MCU is sufficient for many cases. If you design a product, saving power and cost makes the difference.
As far as I know, webassembly only supports a 32 bit address space on all platforms at the moment. There’s a memory64 proposal, but it doesn’t look to be widely adopted yet.
EDIT: definitely not "maybe the most" popular
[0]: https://en.wikipedia.org/wiki/ESP32