Stainless is perfectly fine as far as electrical conductivity in this situation. Technically it's not as conductive as something like copper, but it won't add appreciable resistance to impact a fuel level circuit.
As far as why most are made of stainless now, I think it's purely due to corrosion. If you've ever pulled a sending unit from a car that isn't used often, they can get REALLY crusty. Maybe not a big deal for a car driven daily, but I don't imagine most of our cars fall into that category. The inside of a fuel tank is a surprisingly great place for rust to form when not constantly in use.