I think it basically came about because the matrices stop at -10, even though the rules tell you that you can extend them. Interestingly, the "AC 10" limit makes no sense, given that a low Dexterity could make your unarmored AC higher than that, and I remember a Dragon article about giant amoebas with ACs above 10, lol.
2e encoded it, but even then, we found ways to virtually improve AC beyond that by imposing attack roll penalties (Prayer, Paladin aura, the Blur spell, etc. etc.. The fact that monsters rarely had bonuses to hit beyond the Thac0 granted by their Hit Dice made this pretty rough to challenge high level PC's. And some monsters were inexplicably nerfed, like the 70 HD Tarrasque (should be Thac0 -13) had only a Thac0 of...5?!
Not with dragons though, dragons were cheaters, lol. A 17 HD Great Wyrm Red has a Thac0 of -12 thanks to it's "draconic combat modifier", lol.