Why is 21 damage from a commander lethal?
The original rules for Elder Dragon Legend Wars had the following as part of the rules:


players choose (or select at random) an Elder Dragon Legend as their army's leader. The dragon must be supported by creatures and spells corresponding to each of the Dragon's three specific casting colours.
Players designate and announce three of their creatures as "Warlords" and two creatures as "Captains". If an opponent destroys a Captain, the Captain's controller takes 2 damage, and the destroyer gains 2 life. If a warlord is destroyed, the controller takes 3 damage and the destroyer gains 3 life. And for an Elder Dragon, the controller takes 4 damages, the destroyer gains 4 life.


I'm not sure when or how the rules where modified to add the 21 damage rule, but I found an interesting thread on the MTG boards. Someone who goes by the handle TheTrueNub posted this:


  Well, I can tell you why the 21-damage rule was put in place, anyway. It didn't start out as anything to promote certain archetypes like voltron. "Commander" as we know it was once "Elder Dragon Highlander," the reason being that you'd choose one of the five Elder Dragons of Legends block (Arcades Sabboth, Chromium, Nicol Bolas, Palladia-Mors, or Vaevictis Asmadi) as your commander. Each of these dragons are 7/7, therefore three successful swings equals 21 damage. Though nowadays you don't have to use an Elder Dragon as your commander, the "21 Elder Dragon damage rule" is still preserved to this day.


This makes sense to me. I imagine he "three swings rule" was a flavourful rule added to ensure a large multiplayer game didn't drag out for too long and that aggro strategies were viable. Without this rule, it's too easy to build a lifegain and/or control deck that wouldn't give combat-oriented decks a chance.