The version sung and played now has the following ancestry:

Originally and English hymn written by a reformed captain of a slaver.

Words most commonly sung now originate from the United States.

Tune most commonly associated with the hymn is Scottish.

So why shouldn't it be played on the bagpipes.

As far as I know and I haven't heard of any change the "official" national anthem of Scotland is still Scotland the Brave. The more commonly played, however, "unofficial" national anthem of Scotland is Flower of Scotland. For Northern Ireland it's The Londonderry Air, for Wales it is "Land of My Fathers" and for England it's "Land of Hope and Glory". These are the tunes played at sporting events (Commonwealth Games). I said as far as I know regarding the Scots one because it's been so long since we won a gold at anything I haven't heard a Scots one played.