Why /bin/sh Points to /bin/dash Instead of /bin/bash

It's because Bash behaves differently when $0 is sh.

From Bash's behaviour [Bash Hackers Wiki]:

SH mode

When Bash starts in SH compatiblity mode, it tries to mimic the startup behaviour of historical versions of sh as closely as possible, while conforming to the POSIX® standard as well. The profile files read are /etc/profile and ~/.profile, if it's a login shell.

If it's not a login shell, the environment variable ENV is evaluated and the resulting filename is taken as name of the startup file.

After the startup files are read, Bash enters the POSIX(r) compatiblity mode (for running, not for starting!).

Bash starts in sh compatiblity mode when:

• the base filename in argv[0] is sh (Attention dear uber-clever Linux users… /bin/sh may be linked to /bin/bash, but that doesn't mean it acts like /bin/bash)

More information can be found at the Bash Reference Manual: Bash POSIX Mode, specifically:

• Process substitution is not available.

which is why your sh script is failing, as the <(..) syntax is using process substitution.

I did some reading on this and the conclusion seems to be that it is the default shell of GNU (used by most Linux based OS), and therefore simply comes packaged as part of GNU, while also having 20 years of development behind it making it stable and well rounded, it is simply the best all rounder, meeting the needs of all but the most advanced users.

For more, read Why is bash standard on Linux? (the same question on Unix & Linux).

Just to add a bit more to this, there are many other shells to try, if you are interested, here's a few from this answer:

• Zsh has more advanced interactive facilities, but a few quirks when it comes to scripting (less so now than back in the days). In the early to mid-1990s when Linux was in its infancy, zsh was virtually unknown.

• Ksh was the de facto standard on commercial unices since the mid-1980s, but it was proprietary software until 2000, so not an option on Linux. Also, ksh had subpar command line editing capabilities, compared with bash.

• Pdksh, a free clone of ksh, would have been an option, but it was not well-known and had poor command line edition capabilities. (Pdksh is no longer a very active project, even though it's still used in some BSDs, now that ATT ksh is free.)

• Some distributions install an ash variant as /bin/sh. Ash (by which I mean any of the loose family of shells called ash) is designed to be small and fast, with no interactive features (it's only for editing scripts). The ash revival is relatively recent; in the 1990s the existing variants lacked a lot of features.

• Tcsh was the most advanced interactive shell until zsh came along, but it's incompatible with sh and not so good with scripting.