The industry used apache a lot and it deserves kudos, but it was a poorly architected from software from the start. Aolserver was a much better server as is erlang yaws.
Yaws is neat, but it's kind of difficult to compare to Apache because it doesn't do as much in terms of some of the handy tools that Apache ships with, and at the same time it does more because you can write dynamic applications with it directly. Also, once again, I think it was released when Apache already was quite popular and widely used. Furthermore, the pool of people capable of hacking on C is orders of magnitude larger than that of Erlang hackers.
And when it comes down to it, Apache's way of doing things isn't that bad when you consider that it potentially has a lot of things loaded into it: those can fail occasionally without taking down the whole thing. And it's not as if Apache forks a new process for every request it receives.
Remember how much PHP crashes?