Because most of the states (I'm assuming you're in the US) continued to use the Pass/Fail grading scale and just added on the higher grades. Now failure can be seen with 4 different letters: E, F, N (no credit) and U (unsatisfactory).
A, B, C, D are equivalent to 4.0, 3.0, 2.0, and 1.0 respectively. F stands for Fail or Failure! It makes more sense than does E, which might be thought as Excellent! I've never thought of C and D. Are they passed grades?