Why isn't ΔG equal to zero for this equilibrium reaction?
You are mixing up two different quantities. The equation you are using describes the standard Gibbs free energy of reaction $\Delta G^{0}$, i.e. $\Delta G$ for standard conditions without any requirement of the reaction being in equilibrium.
And this quantity can very well be different from zero.
For non-standard conditions the Gibbs free energy of reaction is

\begin{equation}
 \Delta G = \Delta G^{0} + RT \log K
\end{equation}

and as you stated correctly this quantity must (per definition) be equal to zero for equilibrium conditions.

For a derivation see this answer of mine.