The short answer is that it's what we've been using in Backstage internally.
The original choice is based on Google's material design being a thorough and well thought out full design system, with many mature and powerful libraries implementing both the system itself and auxiliary components that we knew that we would like to use.
It strikes a good balance between power, customisability, and ease of use. Since a core focus of Backstage is to make plugin developers productive with as few hurdles as possible, material-ui lets plugin makers both get going easily with well-known tech and a large flora of components.