I guess a big part of it is that Scott just took the name from the Ginsberg poem and probably only did a quick lookup on who Moloch actually was (as he was more interested in Ginsberg's Moloch than in the Canaanite Moloch)?
So by calling Moloch a demon, you are participating in perpetuating a potentially false history of Moloch that is heavily biased and Judeocentric. Sure you can call him an evil pagan god, but to call him a demon requires fitting that into a prior belief system of evil supernatural entities which is inconsistent with the very belief system he came from.