When I w' lad everyone knew it stood for Eight Megs And Constantly Swapping. ;)

I'm pretty sure though that Emacs is actually short for Editor MACroS.

A nod to the fact that Emacs is really an extensible Lisp system rather than just an editor or IDE.

As far as I know E was just the name of an extensible editor back then, and the very first thing named Emacs was a useful collection of custom macros. And then followed various reimplementations of the whole program until one written in C stuck around.