I thought it was called French Toast because it was a French custom to fry stale bread.
But I could be wrong.
The history of French toast is less complex, but also less certain. The most popular theory on the origin of French toast—bread slices fried in egg batter—states this recipe was created by a tavern owner in 1724 just outside Albany, New York. Supposedly, Joseph French, the restaurateur, listed the dish on his menu as ‘French Toast,’ named for himself. This is why the French in French toast is often capitalized. Cite
If you can find a print cite for the term “French toast” to mean ‘bread dipped in egg and fried’ before the 1870’s, I’d like to see it.
Like so many factoids on the web, this one is bankrupt.
Please note that I’m not disputing the probable French custom of frying stale bread in any manner.
Or it could just be because the rules of English usage call for capitalizing adjectives derived from proper nouns. Things pertaining to France are not referred to as “french”, but as “French”.