I've often pondered this myself, and the best explanation I can think of is that students and teachers might mistake an "E" for an "F," and vise-versa. Kids' (and sometimes teachers') handwriting is often hard to decipher, and just like the "T" and "F" issue for true/false questions, many a kid has tried to explain to a teacher that "That's a t, not an f, and you marked it wrong!" when clearly the child made an attempt to make the mark look like both a T and F, that way doubling the chances of getting the problem right ...and wrong...
Ok, I just did a search and this is what I found:
F (Also N or E or U): Failure or Exceptionally Poor; or bottom 60% (0-59) = 0.00
Percentage ranges may vary from one school to another. In some schools, these ranges may even vary from one class to another.
Whether the failing grade is F or E typically depends on time and geography. Some states, but not many, have tended to favor E since World War II while the majority of the country tends to use F. Ultimately, the grade F traces to the days of two-point grading as Pass (P) and Fail (F).
So, it seems as if sometimes, grading scales DO use E, for exceptionally poor, instead of F for fail.
You learn something new every day!
Hope this helps! ;-)