From Joel’s Back to Basics:
Why do C strings work this way? It’s because the PDP-7 microprocessor, on which UNIX and the C programming language were invented, had an ASCIZ string type. ASCIZ meant “ASCII with a Z (zero) at the end.”
Is this the only way to store strings? No, in fact, it’s one of the worst ways to store strings. For non-trivial programs, APIs, operating systems, class libraries, you should avoid ASCIZ strings like the plague.