Why do RC applications use such a small PWM duty cycle?
The reason for the long gap is so that the transmitter can send all of the other servo positions.

In the days of clothes-pegs and crashed aircraft from frequency collisions, radio control was done with AM at 27 MHz.

The transmitter would send a sync pulse, and then a series of 1-2 ms pulses, one for each servo. The earlier ones delayed the later ones, didn't matter much. These are just RF pulses, no special modulation.

The receiver would receive the pulse stream, synchronise on the first one and then direct each successive pulse in turn to a different servo socket.

So to allow for maybe 8 channels set to 2 ms, and have some gaps, you need about 20 ms. With an 8 channel transmitter, the duty cycle on the combined RF channel would have been over 50%.

This servo protocol, of 1-2 ms every 20 ms, has just stuck around from then.

This site about making a PC digitiser for your remote control  has some oscilloscope graphs showing four or five channels.