It seems that ICANN did consider this choice among others, but reject for the lack of meaningfulness:
> The qualitative assessment on the latter properties was performed in the six United Nations languages (Arabic, Chinese, English, French, Russian and Spanish). [...] Many candidate strings were deemed unsuitable due to their lack of meaningfulness. [...] In this evaluation, only two candidates emerged as broadly meeting the assessment criteria across the assessed languages. These were “INTERNAL” and “PRIVATE”. Some weaknesses were identified for both of these candidates. [...]
I wonder if this means that they only scored the highest among others and all candidate strings were indeed unsuitable, but that they had to pick one anyway. I'm not even sure that laypersons can relate `.internal` with the stuff for "internal" uses.