ECHO(1) FreeBSD General Commands Manual ECHO(1)
NAME
echo — write arguments to the standard output
For this definition, -n should mean merely a sequence of two bytes to be written to stdout. Why not just use printf instead? It is way more flexible and powerfull, and "printf x" always prints "{'x', 0}";.
The POSIX spec is basically the minimal intersection of all commercial UNIX distros of its day. It defines a minimal system that happened to be what everybody already had implemented. For the most part you are allowed to add features to a POSIX base to make a real OS, since that's what everybody had.
This is also why the old Windows POSIX subsystem was so useless. It implemented only the minimal amount needed to check off the box on a feature list, and none of the stuff you need to actually make a system usable.
That said, POSIX has a fair bit of braindamage baked in and people can be excused for ignoring the worst parts and instead doing the right thing.