ISO was designed to store data in a format ready to be written to optical media. Today, ISO is commonly used to distribute bootable images for USB flash sticks as well as images of various software distributions that are still designed to be writable to optical media. ISO is limited in its imagining capabilities, not being designed to store full proper disk images.
The closest alternatives I could think of are virtual disk file formats but their openness is highly debatable and I don't see them widely used outside virtualization software. It seems, for decades, new and often closed formats were created along with various new software having anything to do with disk imagining.
Edit: en.wikipedia.org/wiki/ISO_9660#Limitations (am not allowed to post as a link) for those who requested more info about ISO's limitations. Note, I'm not criticizing ISO for being unable to work as a general disk image format since it was never designed for this purpose.