Vartabedian, A. G., published in 1971 that people can recognize isolated words better if all capital letters are used. “The Effects of Letter Size, Case, and Generation Method on CRT Display Search Time.” Human Factors, 14, 511-519, in Wickens.
The effects of letter size, case, and generation method were studied in a task of searching for a common five-letter word in a CRT display. Symbol sizes of 0.12, 0.14, and 0.16 in. were evaluated. Words were composed of all uppercase or all lowercase letters. Two symbol generation methods-letters drawn by means of continuous strokes and by means of a seven-wide-by-nine-high pattern of dots in a fixed matrix-were investigated. The results indicated that for both methods of symbol generation, uppercase words were searched 13% faster than lowercase words. No significant differences were found due to symbol generation method or letter size.
Alex Feinman, in the comments below, points to a more recent by Aries Arditi and Jianna Cho published in 2007, Letter case and text legibility in normal and low vision
It is thought by cognitive scientists and typographers alike, that lower-case text is more legible than upper-case. Yet lower-case letters are, on average, smaller in height and width than upper-case characters, which suggests an upper-case advantage. Using a single unaltered font and all upper-, all lower-, and mixed-case text, we assessed size thresholds for words and random strings, and reading speeds for text with normal and visually impaired participants. Lower-case thresholds were roughly 0.1 log unit higher than upper-. Reading speeds were higher for upper- than for mixed-case text at sizes twice acuity size; at larger sizes, the upper-case advantage disappeared. Results suggest that upper-case is more legible than the other case styles, especially for visually-impaired readers, because smaller letter sizes can be used than with the other case styles, with no diminution of legibility.
This notion is brought forward into the U.S. Military Standard 1472, which guides the Human Engineering for all military systems including aviation. The appropriate requirement we must meet for labeling is as follows:
126.96.36.199.4 Labels. To make the display as meaningful as possible and to reduce user memory requirements, every field or column heading shall be labeled. Labels shall be unambiguously related to the group, field, or message they describe. Labels shall be highlighted or otherwise accentuated to facilitate user scanning and recognition. Labels shall be unique and meaningful to distinguish them from data, error messages, or other alphanumerics. Labels shorter than three words shall be displayed in upper case only. Labels longer than three words shall be displayed in upper and lower case.
While not part of the DOD, both the FAA and airplane manufactures borrow heavily from these standards. This is done for multiple reasons including safety (i.e., the reason why the MIL-STD says you should do it) and also cost -- in the case of airplane manufacturers you only have to design it once.