AGS has been around for ages, it has a reputation of being easy to use, it has retro appeal and it has a huge active community. I think that's why it's so popular. Personally I'm quite suspicious of AGS and haven't used it much, and besides, I prefer to code things by hand anyway... On the other hand I haven't released any games either, although with The Curves of Danger we were kinda close.
I think games made in some other engine actually have slightly better chances at getting recognition, because the huge amount of AGS games released - if you release an AGS game it easily becomes just Yet Another AGS game.
