One theory is that it derives from folks living in a cabin calling out "Who's yere?" when there was a knock on the door. Another is that it derives from the frontier practice of biting off ears in a fight; afterwards someone would ask, "Who's ear?"

Having lived there for 16 years or more my own theory is that they had to call the IU sports teams something and "Boilermakers" had already been taken by Purdue and "Fighting Irish" by Notre Dame (both of which claim to be the "real" Indiana university). So on the night that IU's then-nameless basketball team made it's first basket, they named the team from the sound of the collective intake of breath by the fans.

The next basket was made in 1961....