Why "ETH" in degrees awarded by ETH Zurich?
This seems to be historical. ETH is a university. Switzerland also has institutes formerly called Höhere Technische Lehranstalten (HTL), which are now called Fachhochschule.

The preconditions to enter the ETH and a Fachhochschule differ significantly. Finishing a degree at ETH used to take significantly longer, and the curriculum at ETH involved far more advanced mathematics.

Formerly the titles attained at a Fachhochschule was Dipl. Ing., Dipl. Ing HTL or Dipl. Ing. FH and the title you got at ETH was Dipl. Ing. ETH. As you guessed correctly, Dipl. Ing. ETH was a clearly superior different and more extensive education. The title from a Fachhochschule was roughly equivalent with a BSc while the title from ETH was comparable to a MSc from a competitive international university. This changed only recently, with the introduction of Bachelor and Master degrees in Switzerland a few years after the year 2000. 

Nowadays graduates of a Fachhochschule usually get the title BSc, and graduates of ETH usually get MSc degrees, and have the option to cut their studies short and end them with a BSc degree, although last I heard it was still very unusual to do so.