Wasm probably is the better choice tbh, for all the technical reasons. I just have the impression that it's not very lightweight in most cases, and tooling so far is not easy to work with. Case in point:
The goal with OstrichScript is to make it accessible to normal people. I feel like this fits the nostr ethos really well (nostr doesn't make the "right" technical choices).
And, of course, it's compatible with a wasm standard too — it would be very easy to download lua scripts, compile them, and re-publish them using nostr extensions. Or, clients could do the compilation on their end as an optimization step.