It all stems from Microsoft’s relationship with IBM.  For DOS 1.0, DOS only supported floppy disks.

Many of the DOS utilities (except for were written by IBM, and they used the “/” character as the “switch” character for their utilities (the “switch” character is the character that’s used to distinguish command line switches – on *nix, it’s the “-” character, on most DEC operating systems (including VMS, the DECSystem-20 and DECSystem-10), it’s the “/” character” (note: I’m grey on whether the “/” character came from IBM or from Microsoft – several of the original MS-DOS developers were old-hand DEC-20 developers, so it’s possible that they carried it forward from their DEC background).

[Via Larry Osterman’s WebLog]