Any sources for that? I know Lua is often used as a scripting language in 3D games since it is very easy to embed a Lua interpreter into your game. If you haven't seen it, you should take a look at the lua source code. It's beautiful.
Essentially, you are making a nice internal API to your engine objects that you can manipulate, and experiment with, on a higher level without recompiling your application all the time. Python is also nice for this purpose (see OGRE 3D), but it's not as lightweight as Lua.
So in a sense, it's better to use Lua for parts of your engine that will change a lot, depending on what aspect of the engine you are a focusing on at the moment (like tweaking how the enemy A.I. works, for example). This is especially useful at the prototype stage of your application.
We needed an easy-to-use configuration language, and the only configuration language available at that time (1993) was Tcl. Our users did not consider Tcl an easy-to-use language. So we created our own configuration language.
Given how different Lua ended up, though, I imagine there was more to it than that.
LuaJIT is wicked fast, and being able to have multiple VMs with a single interpreter is very nice as well. With cooperative coroutines, a nice C API (for calling into lua) and C/Invoke for calling out of lua nicesly, it is a very clean and effective way to power your applications.
