I don't think you're quite right there. It was mandated by the US Department of Defense for years (DOD-STD-2167). Since they were (are?) the biggest software customer in the world, this was influential beyond the DoD.
Although there are a great many blog posts on this subject, they mostly (including this one) are uncredited paraphrases of Craig Larman's excellent research on the history of iterative development. It was Larman who figured out that Royce's original paper described waterfall as what not to do, Larman who figured out the history of how the DoD adopted it anyway (basically, they didn't read the second half of the paper), and Larman who tracked down the guy who had been responsible for that decision. IIRC, they met for lunch in Boston and his first words to Larman were "I'm so sorry!"