It was a financial deal that rose after deregulation by the major carriers at the time.
Long story short, it never had any basis in medical fact, just kinda one of those rules of thumb that stuck and didn't get repealed by age discrimination laws along with the "maximum hiring age" that some carriers used to have.
Age 60 accomplished a whole lot of things financially for the carrier.
1. Allowed older (more expensive) pilots to be booted in favor of a newly-upgraded, lower-pay-scale CA.
2. Allowed the company to get rid of guys as their health hazards increased (a HUGE amount of pilots from that era smoked, and the non-military pilots have, until the last decade or two of health consciousness, had TERRIBLE health histories).
3. Allowed the company to plan exactly how much a pilot would cost the company over their career by knowing the max age at entry into the company and max age at exit.
Other stuff too, but I don't want to get too long-winded. I do that when drinking.