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The similarity to D&D is certainly part of it, however I would say that the biggest reason for the popularity of Diku derived muds is how easy it is to get a finished game up and running. The original Diku came with a ready made world with spells, combat system, monsters to kill, treasure to collect etc. The same can be said of most LP mudlibs.
People who complain about the non commercial licensing of Diku and LP often overlook that there are many more codebases that allow commercial use just fine. Tiny, mux, mush, MOO, coldc and coolmud for example are all established codebases which allow commercial use, yet they require considerably more effort to get a game ready to play. I would say that is likely why they are far less popular.
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