Also if time is scarce, following pointers is slower than calculating offsets, but that's usually not an issue worth thinking about.
Another reason to keep memory contiguous is that fragmentation can be much more punishing (sometimes), especially when latency is important. On large devices it doesn't matter much if you're under-utilizing the CPU while waiting for RAM, because the OS will do other things and then let you do a lot of work all at once. Embedded processors will have nothing else to do.
It seems like allocating nodes out of a fixed size array wouldn't be too bad, though.
On devices with 1 GB of memory, the contiguous structures are usually better, but embedded developers often still reach for linked lists. On devices with 1 kB of memory, trained software engineers will scoff at linked lists and instead waste hundreds of bytes on large buffers sized for peak usage.
There are alternatives, of course. Your particular target might perform poorly with linked lists, so you might make your malloc use a different internal data structure. Or you might have plenty of flash but not much RAM, so you might trade code size for runtime overhead. Or... There are lots of alternatives, but a linked list is the simple default.