I'm guessing it's because /etc contains configuration files and dot-files are just configuration files. Or do you mean, why was /etc named etc?
"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)."
As someone said - naming things is the hardest!