Because the Java Virtual Machine is designed for Java, and that is what all vendors care about.
Kotlin is Google's C#, with Android being Google's .NET, after Google being sued by coming up with Google's J++, Android Java dialect.
Since Google wasn't able to come up with a replacement themselves, Fuchsia/Dart lost the internal politics, they adopted the language of the JetBrains, thanks to internal JetBrains advocates.
| Android being Google's .NET, after Google being sued by coming up with Google's J++, Android Java dialect.
The Oracle v Google was specifically over copyright infringement concerning the Java APIs used in Android's original implementation (Dalvik/ART), not about creating a "J++" dialect.
Android never ran a JVM on mobile because it cannot be optimized for resource constrained devices a solution like DalvikVM was necessary. If you want to level critiques about creating fragmented dialects of Java I would recommend starting with J2ME. The only nice thing I can say about J2ME is at least it died.
The Android ecosystem was far too mature for Fuchsia/Dart to be successful without a very compelling interop story that was never produced.
As a technology Kotlin met Android's platform and community needs. Advocacy and politicking played a minimal, if any, role.