I think Airco had the first true pressurized cockpit around 1920 (maybe shortly after). The effects of Hypoxia can hit people differently and may take effect upon people as low as 5,000 feet. A very small percentage of WWII pilots washed out because they could not maintain normal coordination above 5,000 feet. I think the US tested pilots at 8-12,000 early on in their flight program. Some brilliant engineer had calculated how much oxygen the average person would need over a set amount of time, and the gear was calibrated to deliver that amount. If you could not maintain normal function without oxygen below 12,000 feet, then you would not survive the average mission because you would be consuming too much of your supplied oxygen. Meanwhile, there would be plenty of oxygen for someone that could breath easy, as it were.
The amount of oxygen available increases with altitude. The ability to maintain a pressure altitude of 8,000 feet decreases as altitude increases above 23,000 feet (actually varies from aircraft to aircraft).
