Why do people create web server on a microcontroller?
I have done this in a few products.  So far the reason has been to allow for simple field configuration.  Each time the product already needed to be connected to ethernet for reason of its main operation.  The web server was therefore merely added code in the microcontroller.

The big advantage of a HTTP server is that no special hardware or software is required to present a reasonable user interface to the end user.  Everyone already has a web browser, so this is no bother for the customer.  Think about other alternatives.  You could provide a RS-232 port, but then you either have to provide a custom app or explain to someone how to set up a terminal program with the right baud rate, start bits, stop bits, and parity.  You also either have to supply a cable or hope the customer has one, and someone has to go to the unit and physically connect to it.  USB doesn't have the same configuration problem, but would generally mean a whole separate micro in the product and there you need a custom program to run on whatever platform the customer might have.

As for RAM, that's not much of a issue for a HTTP server.  A TCP protocol stack needs some RAM, but the HTTP server not really, except for the extra resources it may require from the network stack.  A web server mostly needs ROM space, since most of every page is constant, usually with a few values converted to text and inserted on the fly.  Web servers for small micros work with ROM file systems and escape sequences in those files that cause your application code to be called to produce customizable strings for insertion at a few pre-defined places.

So far I have used a PIC 18 in all these cases.  While the less then 4 kbytes of RAM is a limitation, there is still a lot you can do.  ROM space hasn't even been close to a issue.  My network stack for the PIC 18 (available in my PIC Development Tools release at www.embedinc.com/pic/dload.htm) takes only a small fraction of the ROM space of a 18F67J60, which is a nice part for such things since it has a complete ethernet MAC/PHY built in.  In one case I have that PIC being a server for 6 simultaneous TCP connections.  It's really not as heavyweight as people seem to think.