Hah, that's exactly what I brought up in the interview - why squirrel?

I've talked to our CEO and the original core team about this a couple times. In their minds LUA, while 7 years ago was more widely adopted, was also less well supported and more volatile than squirrel. Squirrel got the job done, was pretty straightforward, and was small to get going. And, once the decision was made and customers were already compiling it onto live projects.... Well, at least there haven't been growing pains as a result, it still gets the job done and we have metric tons of libraries for it.

Also the files end in .nut which is incredible.

Edit: to note, it's not exactly squirrel, we made some changes: https://electricimp.com/docs/squirrel/learningsquirrel/