Doesn't help that the rest of the computer world outside of games still use the arrow keys to move up and down (amongst other options, but it's never disabled by default).
This is solely because the arrow keys are to the right of the main keyboard area (overlaid with the numpad on PC keyboards, and in between the main keyboard and the keypad on most AT-standard keyboard layouts), which means that right-hand mousers cannot use the mouse and the arrow keys at the same time without placing their left hand on the keyboard in an odd and awkward position. A righthanded mouse user only has their left hand available for keyboard operations while they're using the mouse at the same time, which means to be non-awkward all keyboard controls that are intended to be used at the same time as the mouse have to be on the left side of the keyboard. If the arrows were to the left of the keyboard, we'd have just used them. For that matter, I suspect that if the function keys, which were to the left of the keyboard on the original PC keyboard, were still there we'd be using
those instead of WASD. And yes, I've seen games from the late 1980s and early 1990s that did exactly this, although not many. A keymapping using function keys as arrow/movement keys that was viable on the PC/XT keyboard would be madly awkward on the AT keyboard, and by the mid-1990s practically everyone was on the AT layout or some variation of it. This is all basic human-computer interface engineering, which really everyone who writes UIs should be either aware of or able to figure out fairly quickly, but sadly far too many software developers haven't really put much thought into these issues.
All that said, WASD is quite a bit older than Dwarf Fortress. The first known instance of WASD keyboard controls was in the 1986 game Dark Castle, although the earliest game probably best known for being a "WASD controlled game" would be Half Life, released in 1998. However, I suspect Toady wasn't a big player of games like Half Life, and Daggerfall, which Toady has specifically mentioned as an inspiration, defaulted to using the regular arrow keys for movement. While Daggerfall has mouse support, the game (like many other games of the 1990s and even early 2000s) is entirely playable without one.