The only problem is that it had a feeling of non-robustness when using it, and because of that I was tempted to have multiple copies of my repos, just in case of corruption. And that kinda defeats the purpose of VCS.
Then, git came along. Although a bit strange in the beginning, especially on windows, it felt robust enough from the start. And it supported multiple workflows. I know that, whatever stupid thing I do in my repo, git will never loose any data, and I'll be able to google an answer how to recover from my mistakes.
That being said, I'm glad darcs is still alive and kicking. Guys behind it are really smart, and who knows what new good ideas can come from it.
You are forgetting Tom Lord's arch, which had a really bizarre interface (even more so than Darcs), but was conceptually very nice.
Darcs has a terrific consistent interface. Git has taken liberally from it. "git log -p" and "git add -p" are straight from darcs. AFAIK, nothing before darcs could look at a repo as a stream of diffs and comments.
Other projects not mature enough yet (and/or moving fast enough in that direction) and he wanted something now?
Or some technical points that he disagreed on, so wrote his own solution that worked the way he preferred instead of trying to change the established workings of other projects?
Here are Linus's comments about Darcs: http://markmail.org/message/vk3gf7ap5auxcxnb
As far as why not Mercurial, Mercurial was announced on April 19th. Git was announced on April 9th, and was self-hosting on April 7th. There were benchmarks comparing git and Mercurial shortly after Mercurial was announced, and git was faster, although at least originally it used much more disk space (this was before git had implemented compression and pack support).
I think you might be thinking of Monotone here. Mercurial was started some days after git.
EDIT: Wikipedia has some info about what Linus thought of Monotone. The key problem with it was performance. I have no idea to what degree they have been fixed today.
https://en.wikipedia.org/wiki/Monotone_%28software%29#Monoto...
Git and Mercurial were started within days of one another, for the same reason (loss of BitKeeper license for the kernel devs).
Mercurial was actually announced 2 week after Git (2005-04-19 vs 2005-04-06)