You can ask this question for most of unix. Why /etc? Why /bin and /usr/bin? (Answer: At one time hard disks were very small and crashed a lot), why do we presume screens are black and white, etc, etc.
Try to change any of it though, and a lot of luddites will come out screaming bloody murder. It's just not UNIX if it makes sense.
The origins of /etc are lost in history. Wikipedia [1] says that at Bell Labs /etc was pronounced "et caetera," and contained files that didn't belong elsewhere. And it had the advantage over conf or misc that it was only 3 letters.
"There has been controversy over the meaning of the name itself. In early versions of the UNIX Implementation Document from Bell labs, /etc is referred to as the etcetera directory as this directory historically held everything that did not belong elsewhere (however, the FHS restricts /etc to static configuration files and may not contain binaries)."
Try to change any of it though, and a lot of luddites will come out screaming bloody murder. It's just not UNIX if it makes sense.