Besides the cop-out of 'that's what they always called it,' it's a little hard to answer. Here's a quote from the 1st Edition rulebook:
"KARMA
In Shadowrun, Karma measures the experience characters get when they go out on an adventure. You don't get Karma for doing the laundry, unless your laundromat is in an urban combat zone. Karma is needed to improve attributes, skills, and special resources.
Karma is awarded at the end of an adventure, not necessarily after a single playing session. The gamemaster decides who gets Karma, and how much they get. Everyone in a group gets it for some things, but some awards go only to individuals. Each surviving member of a team gets Karma for staying alive, succeeding at a mission, and for the amount of danger in the mission. Individual characters can get additional Karma for good roleplaying, gutsy fighting, smart planning, sheer luck, and other personal feats.
Once you get it, what do you do with it? You can spend Karma one of two ways: as Instant Karma or Good Karma."
Instant Karma was a lot like Edge in the current edition, and Good Karma was improving yourself.
It's probably attached to the vaguely Japanaphilic theme from a lot of Cyberpunk; a good fraction of Japan follows Buddhism. As one (simplified) definition of karma is 'a sum of a person's actions which decides their fate,' using Karma as their term makes sense. By raising your Reaction using time dedicated to practice, you're making yourself dodgier, thus less likely to die.