Yes, the reason is easier pronunciation. It applies to all prepositions with one letter (k, s, v, z). We can add –e (or -u for k, e.g. "ku příkladu"). But only if it is needed (same or similar letters in a row). If you do not add this, it is not a mistake.
It is not used for s-p... ("s pravdou"). It would be a mistake here.
In Czech one says neither, those are English words. In English, at least as I am aware, one can say either. See also https://forum.wordreference.com/threads/what-happened-with-vs-what-happend-to.2880176/ This opinion https://www.quora.com/What-is-the-difference-between-happened-with-and-happened-to might suggest that to might be better here, but I am not a native English speaker.
If you ask me, why the author chose this and not the other - I don't know.
In Czech we use both. "Co se stalo Františkovi?" (happened to) and also "Co se stalo s Františkem?" (happened with). The difference in meanings is similar to that in English. But we don't use the first one for inanimate things. Only when we want to express some emotions with this thing. E.g. "Co se to stalo mému (milovanému) autíčku?"
In English one might say either as well, but I expect that "happened to" would be more common, especially if the meaning is intended to be, for example, that truth and love used to be valued things, but now they seem to matter less than they once did. Both "to" and "with" are accepted in this exercise.