My thoughts on "E"
This is all just speculation, no facts or real knowlege to back this up. Please correct any of this that might be off...
It seems (to me at least) that the "E" class simple carried it's name over from the 300E. At the time the 300E was introduced (80's?) There were 3 main body styles. BIG sedans and coupes (SEL, SEC, SE), smaller sedans (300E, 300D, 190E, 190D, plus all the other variations) and roadsters (SL's). In 1993(?) when MB shortened the "S" class model numbers (560SEL to S500, 420SEL to S420, etc.) there was no need to shorten the W124 cars so they just moved the "E" to it's new location in the front. Deisel models just got mixed into this new "E Class". So, I guess what I'm saying is I think that the current "E" is the old "E" which used to signify fuel injection, but now is just a meaningless "E". I don't even recall MB's being refered to as "classes" until the changes in the early '90's. "SEL class" just sounds too cumbersome, and "TD class"?? I just don't think so.