I think C being the peoples key may date back to the time when pianos or claviers did not have any black notes, so every tune was in the key of C. The joke was "why did J.S Bach have so many children? the answer being "he had no stops on his organ", stops being black notes, or sharps and flats. When these instruments were updated to contain black keys, Bach composed works for the Well Tempered Clavier, which would be the first tunes played in different keys.
The idea of G being the peoples key I would imagine comes from Bluegrass, to suit Banjo pickers playing in open G.
I always felt those annoying song books with tunes written in E flat reflect the fact that person writing the music played French Horn or some other instruement that was resstricted to E flat.
Mandolin Maestro Jethro Burns developed his style by playing along with Jazz/Standards records in awkward keys like A flat or E flat "cos that the way it was writ" and who was he to change it.