Original 1982 net.lang.c posting by Dennis Ritchie. "Several hundred kilobytes of source code, and maybe 3 installations", I guess that explains it :-)
From decvax!harpo!npoiv!alice!research!dmr Fri Oct 22 01:04:10 1982
Subject: Operator precedence
The priorities of && || vs. == etc. came about in the following way.
Early C had no separate operators for & and && or | and ||. (Got that?) Instead it used the notion (inherited from B and BCPL) of "truth-value context": where a Boolean value was expected, after "if" and "while" and so forth, the & and | operators were interpreted as && and || are now; in ordinary expressions, the bitwise interpretations were used. It worked out pretty well, but was hard to explain. (There was the notion of "top-level operators" in a truth-value context.)
The precedence of & and | were as they are now.
Primarily at the urging of Alan Snyder, the && and || operators were added. This successfully separated the concepts of bitwise operations and short-circuit Boolean evaluation. However, I had cold feet about the precedence problems. For example, there were lots of programs with things like
if (a==b & c==d) ...
In retrospect it would have been better to go ahead and change the precedence of & to higher than ==, but it seemed safer just to split & and && without moving & past an existing operator. (After all, we had several hundred kilobytes of source code, and maybe 3 installations....)