29 inches is the approximate outside diameter of an approximately 2 inch wide knobby tire mounted on a 700c rim. Fuzzy memory says that the specific tire was the 700c x 50 WTB Nanoraptor, and that they really did measure right about 29 inches. I was working in a shop when 29 started to happen, and as I recall, the reason that they called them "29 inch" instead of "700c" was that MTB wheels were 26 inch, and 700c was the road wheel size, and they didn't want to confuse anyone.

So they decided to confuse everyone.

Then, when the industry decided that MTB wheels should be 650b, they said, "well, 650b is 584 mm, which is in between 26" MTB (559 mm) and 700c (622 mm), and we called 700c "29 inch" when we put it on a mountain bike, so let's split the difference and call 650b "27.5 inch" if the wheel is going on a mountain bike, so that we won't confuse anyone."

Which confused everyone, by taking the original stupid thing that they did, and squaring the stupid.

If the industry had just called them 700c mountain bikes from the beginning, then 650b would have been 650b instead of 27.5" and everybody would know which tires fit which rims on which bikes, and we can't have that.

I often think that there is a meeting that happens every year at Interbike, where the product managers from the bike and parts manufacturers sit down and figure out what the things are that are comprehensible and how to change them to be more confusing. Tire / rim / wheel sizes are so diabolically confusing that it's gotta be intentional... nobody could possibly screw things up this badly by accident.

--Shannon