Discord tricks the user into using it as a private messaging platform. Its main draw, as I understand it, is the IRC channel clones ("Servers"), which can be public or private/invite-only. It's also got no privacy or security options for the direct person-to-person messages, which people use essentially as an SMS/iMessage/WhatsApp replacement. Encrypted chat at scale is hard, but this is a relatively new product and was built in an era where privacy concerns were well known. The benefits of encryption/privacy/security etc (and drawbacks from the lack of it) are clear.
I understand they need to be able to transmit the data, but they also clearly state that the developers of the product can look at your messages in cleartext. That's absolutely not required. How do you think Signal operates?