It affects the jaw specifically because of the high rate of bone turnover in the jaw when compared to other bones in the body, ethandron. Bone deposition and breakdown is a delicately balanced mechanism within the body, relying on the activity of osteoblasts which help to form bone, and osteoclasts, which help to resorb bone.
The phosphorus that lead to phossy jaw being called that, and the bisphosphonates such as alendronic acid is preferentially laid down in bone with a high turnover rate; In turn they affect the mechanism of bone formation/ resorption, which in turn leads to lesions and other rather nasty outcomes.
So this is why something that you might think should be systemic can have a very localised effect within the body.