Why are emergency inflation cartridges filled with CO2?
CO2 charger cartridges are used for bike tire inflation because they are a common, inexpensive product that has been around since the 1950s. Their other uses include powering air guns and inflating life vests.

They were originally developed by the Crosman Corporation and marketed under the name "Powerlet".

Powerlet cartridges are filled with CO2 presumably because it's the most suitable gas. Reasons I can think of are:


CO2 turns into a liquid at relatively low pressure compare to other gases -
liquids are much denser than gasses so a useful amount of CO2 can fit in a small container.
Containers are easy and cheap to make to withstand the required pressure
CO2 is cheap and easy to make (although probably not very environmentally friendly).
CO2 is inert, will not react with the container material. It isn't flammable but heating a cartridge probably isn't a good idea. 


Updates to my answer seeing as it popped back up on the main page for some reason.

CO2 cartridges are not filled with compressed CO2, they are filled with liquid CO2. That has to be done to get enough of the stuff in the cartridge to be useful. The cartridge is not completely filled however, and the gas pressure in the space is essentially constant (the vapor pressure) as long as there is some liquid CO2 remaining.

You can't put liquid air in a cartridge because it's comprised of nitrogen, oxygen, water vapor and CO2, all of which have different boiling points. In fact, C02 turns to a solid before nitrogen turns to a liquid.