Around 1994 or so, after q.com and x.com were registered, NSI wrote IANA an email explaining this had happened. Jon immediatly saw, as all domainers do, the novelty and whmsy of single letter domains he was staring at and 'IANA' (just Jon's whim actually) very quickly registered all the other single letter domains: a.com(/net/org) through z.com(/net/org). When asked about it he said it was for "possible expansion" and implied he had some vague notion of dividing up the worlds domain names into 26 "buckets", .a.com through .z.com (net/org) per TLD. Tha rationalization for this was he was concerned about the ability of nameservers to handle a very large number of domain names and if that was a problem this might be one possible solution.
Dot com was up to about 800,000 names now and there was concern of scalability past the million domain mark and IANA wanted to hold on to these in case they were needed for expansion or load balancing although it was never explained how. Never mind there are a million domains now, and 79 million of them are in .com.
But, to this day fifteen years later whensoever a tld is designed the first thing reserved is the single letter domains, because that's the way we've always done it. Never mind there doesn't exist a single reason to do this other than "that's the way we've always done it" and I suspect a quick poll of ICANN staffers would find exactly zero of them that know why the single letter domains are "reserved by IANA".
The video linked from the pictre above explains how this works very well. John Berryhill explains the trademark abuse going on in that arena in this article.