For at least certification under the FAA via AC 25-11B all upper case is acceptable but not explicitly required. If you're building an instrument and you know that all upper case will be accepted during certification it's only logical to build it that way.
5.4.2 Regardless of the font type, size, color, and background, text should be readable in all foreseeable lighting and operating conditions from the flightcrew station (§ 25.1321(a)). General guidelines for text are as follows:
5.4.2.1 Standard grammatical use of upper and lower case letters is recommended for lengthy documentation and lengthy messages. Using this format is also helpful when the structure of the text is in sentence form.
5.4.2.2 The use of only upper case letters for text labels is acceptable.
However this NASA study finds that mixed case is actually more legible. But this seems to be applied to lengthly sections of text.
There is almost a consensus among researchers that, when other factors are controlled, lower-case characters are more legible than upper-case (Hartley, 1981; Philips, 1979; Tinker, 1963). Poulton (1967) performed an experiment to determine the difference in readers’ attention between upper and lower-case in newspaper headings. He reports that lower case headings were located faster than upper case heading. Tinker (1963) tested lowercase and upper-case fonts for legibility and pleasingness. He reported that lower case was read faster and ranked higher in pleasingness.
This FAA paper suggests that all-capital letters for single words may be easier to identify
Although continuous text is easier to read when presented in mixed case versus all upper case, single words may be recognized better when displayed in all upper case (AC 25-11A; Ahlstrom and Longo, 2003).
Which may explain why it's used for instruments. They quote AC 25-11A however the language of that AC does not suggest this. But Ahlstrom and Longo, 2003 has some great info on the topic specifically 8.2.5.8 Capitalization specifically subsection 3:
8.2.5.8.3 Use of capitals. Capitalization should only be used for: headlines, key phrases or acronyms, short items to draw the user’s attention to important text (for example, field labels or a window title), the first letter in a sentence, or a single character in each word in a title or label. [Source: National Air Traffic Services, 1999]
I would check out the whole document for more info.
