@OP
osu! is a game that uses many different elements such as many moving objects, scoring, tablet input, taiko and ctb gamemodes, online multiplayer and chat feeds, etc. that make the game work really hard. As such, there had to be cutting back involved. Because the game is so finely balanced, peppy had to resort to removing something he hoped nobody would notice, the captial O. The combined reduction in both file size and rendering from the decreased letter sizes allowed the game to continue working.
That and if we force it to change to "Osu!", the world will probably stop spinning or something like that.