The problem with using HTML in this way is that it couples the view with your data. What happens when non-browser clients (e.g. mobile, other servers) need to easily consume the same API?
I know some projects plan to only ever use browser clients, so this may seem irrelevant for them. But I'd rather not try to predict how a business will want to use it's data in the future, and would prefer to design a backend that can be adapted to many scenarios without being bound to a particular client.
> But I'd rather not try to predict how a business will want to use it's data in the future
Sure, then the backend can expose a gRPC / protobuf interface instead. Mobile apps can readily deserialize this and it will be more performant, both in network bandwidth and data parsing, too, especially with first-party to first-party SDKs. It's strongly typed and serves as a better data contract language than both HTML and JSON. JSON is loosey goosey because of JavaScript.
Then the frontend server now plays the role of aggregating data from gRPC backends and converting it to HTML.
The gravitation to JSON is a case of web developer familiarity.
I know some projects plan to only ever use browser clients, so this may seem irrelevant for them. But I'd rather not try to predict how a business will want to use it's data in the future, and would prefer to design a backend that can be adapted to many scenarios without being bound to a particular client.