A combined 'contain & compress' format is perhaps at odds with the unix philosophy of tools doing one thing well. Meanwhile, zip definitely exemplifies 'worse is better', in that despite the format's quirks and darker corners, it's good enough for most casual uses, and network effects and backwards compatibility help it win out.
From the man page: "Dar can also use a sequential reading mode, in which dar acts like tar, just reading byte by byte the whole archive to know its contents and eventually extracting file at each step. In other words, the archive contents is located at both locations, all along the archive used for tar-like behavior suitable for sequential access media (tapes) and at the end for faster access, suitable for random access media (disks). ... Note also that the sequential reading mode let you extract data from a partially written archive (those that failed to complete due to a lack of disk space for example)."
> Consequently, to use the API, your program must be released under the GPL as well.
GPL is a bad thing for programs like this. It hampers usability. Especially at least the decoder should be BSD/MIT/etc.
If you just want to compress some stuff, zip is perfectly fine and widely supported. (or gzip or tar)
If you want fancy things with better compression, user rights/ACL (either linux or windows style), file dates, encryption, password protection. Well, I don't know what can do that.
An additional feature that sometimes is important as well is making itself stream friendly so you can read the metadata without the entire file (or easily before streaming) as it is streamed over some context or using some technology.
The landscape is much different now and so some of features you'd design into a new format didn't exist then, while others that were concerns are less concerns now.
As parent hints, the compatibility alone makes zip still very desirable and actual compression is good enough given size of disks today for most people. Obviously there are exceptions.
I personally also like ZPAQ for generating archives, though I find it a very poor fit for its suggested use as a backup tool (doesn't handle symlinks, owner, xattr, ACL &c.). As an added bonus the reference implementation is completely composed of public domain and MIT/X11 licensed code, which makes it friendly for linking pretty much anywhere.
Also, there are no tools I'm aware of that will handle that archive structure.