BETA used to have meaning in the old days of software development. Before web development BETA was an indicator that the software was not fully developed nor fully tested.
Web development have changed the reality of software design by dramatically shortening the software development life cycle.
Before web design changing a bug or releasing a new version was a matter of months or even years. This meant that you had to be really careful before releasing a version. This is when a BETA version really had meaning. It was the last chance to see how things worked before the final product was released.
The term was still used traditionally through the 90’s as software development pradigms were changing and people gradually understood that web applications are practically always in beta state. Web apps are constantly being updated. Bugs are constantly fixed and releasing a new version is a mater of a button click.
It was not until around 2004 that the change was “official” and BETA became an “honor badge". Instead of adding to your website title “We are a cool service, a true web 2.0 application” you just added BETA next to the logo.
A great example is Flickr. They kept the BETA as part of their title even after being bought by Yahoo and having millions of users. They're actually now at “Gamma” state :)
I remember reading a “web monkey” article back at around 2000 called the “Anatomy of redesign”. It started with this paragraph:
“According to San Francisco Bay Area lore, there is never a moment when some part of the Golden Gate Bridge is not undergoing a paint job […] by the time the painters get from one side to the other, the thing needs painting again. A Web site works the same way: Once you finish it, technology has improved, users have more bandwidth and higher expectations, your needs have changed. And hey! - a week after the shiny new site rolls off the lot, it's time for a redesign.”
Cheers :)