I believe the developers chose to develop on GitHub so the project would get more exposure to the open source community. And because Gitlab.com is more oriented to private repository hosting. [1]
You are right, the orientation towards on-premises installations is why we don't have public projects yet. But with GitLab Cloud the requests for public projects became louder.
Public projects and the need to add every single developer to every single project they needed access to (no concept of teams) were the main reasons we moved from Gitlab to Github Enterprise