...I always herd the "Blue Devil" name came from a few different things:
1) The test-mule was painted blue, thus recieving the nickname
2) The name was chose to appeal to GM's CEO Wagoner, as he graduated from Duke University, and is a huge Duke Basketball fan
I personally think actual names given to test cars in a little better than the code numbers and letters that so often fill the pages of Magazines and Websites. It gives the car a better identity, and allows the car guy to dream up a better image of the car.
...I can think of a test-mule Saturn Ion that I had seen running at Grattan Raceway just a few miles from my hometown, it had special tag on the back calling it the "Nürburgring Special." Although it looked like a regular Ion QuadCoupe, we saw it running at the time just before the release of the Ion Red Line, which lead us to belive that it was a test-mule for the upcomming GMPD car.