Uppercase also comes first in ASCII, so a naive sort will show README before rEADME

On *nix systems README was always the first file in the directory because everyone tended to use lower case for all their other filenames.

I believe "Makefile" tended to be capitalized too, since you generally wanted to look in there to see how to build the thing.

I don't think anyone wrote that down, it's just how things worked out. If anything it probably was inspired by Alice in Wonderland (Eat Me/Drink Me).

In an alternate timeline, we could have named them MAKEME instead of Makefile.

plan9/9front uses mkfile.

This doesn't make any sense. All filenames were uppercase in DOS so having README in uppercase wouldn't distinguish it visually.

This particular question is not about the origin of README files (the earliest documented is from 1974 on TOPS-10) but about why README remains upper case on mixed-case systems (e.g. Unix). Neither has anything to do with MS-DOS. ASCIIbetical order is a good answer (certainly the reason I named things that way) although it doesn't entirely explain README over ReadMe.

I claim the README convention came from Unix.