If you were creating a 'Decentralized Operating System', the obvious acronym would be DOS.
Unfortunately that name was used over 30 years ago by Microsoft when they created the 'Disk Operating System' back in the early 1980's. So DOS sounds terrible for marketing a modern operating system.
So the next logical choice might be to use the next letter up which is 'E'. Then you get EOS.
It doesn't make much sense unless the 'E' maybe stands for Ethereum as well. 'Ethereum Operating System'.
However EOS will be a seperate block chain to Ethereum so it can't officially stand for that. Yet EOS it is.
As Dan Larimer said, EOS is what Ethereum was meant to be. So maybe it secretly stands for Ethereum Operating System.