Because it's a zero and the | is a one. Arabic numerals are more universal, and the convention of 0 for off and 1 for on was established precisely to avoid picking a language. Then the combined glyph for an on/off button was created, along with the similar broken circle glyph for on/standby. Those have squarish proportions, so the corresponding 0 and 1 glyphs are needed to match those proportions. Hence the four symbols now existing in Unicode (well, 3½)
> the convention of 0 for off and 1 for on was established precisely to avoid picking a language
I figured that politics was the case. What is less supportable is working backwards from that to concoct a rational reason. People who understand digital electronic conventions are highly unlikely to not recognize "ON" and "OFF". Furthermore, anyone who does not know either would find "ON" just as easy to learn as "|".
We could also use "OHM" instead of Ω and "EUR" instead of €, but symbols provide more concise representations of meaning, especially in the case of a combined ON/OFF button. Much easier to fit the universal circle with 1 in it than "ON/OFF". The broken circle with 1 in it is way smaller than "ON/STANDBY". The other two symbols are then necessary to keep the proportions consistent across all four related glyphs.
That's the only argument I've seen for it that makes any sense. I'll counter by saying only "ON" is needed, not "ON/OFF", as the off part is implicit. Same goes for STANDBY.
This has been standard practice for a long time, I'm not just making things up on the fly. BTW, SBY is a standard abbreviation for STANDBY used by the military, if space is a problem. And SBY is a lot more google-able than an icon.
It's not obvious that the "0" is a zero, as opposed to the letter "O" (cyrillic, latin) or the something entirely misleading, as this gesture: http://i.imgur.com/6KZ1nKG.jpg
I suspect the vertical slash | has as many lookalikes as the O, but I won't go there. I do want to mention that, as you demonstrated, the "1" that means on is more often represented as the Latin I or just a vertical stroke as in |, making it just as hard to ID as a numeral, especially if you don't know that the 1/0 are derived from the binary logic gates.
I would argue that the words "ON" and "OFF" when seen as glyphs are much less ambiguous than I/O.