In reference to “restroom” being a euphemism for a public toilet (Why is it called a restroom, anyway? - The Straight Dope), I came across the term being used in a 1906 report to President Teddy Roosevelt (on the condition of the Chicago stockyards) in a manner distinct from the room with the toilets (which was referred to as a “privy”). It reads:
“Rest rooms, where tired women workers might go for a short rest, were found as rare exceptions, and in some establishments women are even placed in charge of privies chiefly for the purpose, it was stated, to see that the girls dd not absent themselves too long from their work under the excuse of visiting them. In some instances what was called a rest room was simply one end of the privy partitioned off by a 6-foot partition from the remaining inclosure.”
(http://www.theodore-roosevelt.com/images/research/txtspeeches/963.pdf)
There are several interesting points implied here. One is that there was special concern for the women, probably because they had less physical strength and so were assumed to get tired more easily and need to take a break. Or possibly because of beliefs about the impact of their monthly cycle on their stamina.
This historical provision of “rest rooms” for women may also explain that curious phenomenon of there often being couches and chairs in a vestibule within a women’s public bathroom, but nothing comparable in the men’s room.
Clearly the expectation was that the “rest room” would be a separate place from the privy. It was considered inappropriate that some workers were given nothing more than a partitioned-off area of the bathroom. Surely this was more of a problem in the filthy and smelly environment they describe, in which proximity to the “privy” would be unpleasant. (There were not even handwashing facilities in the bathrooms, or anywhere else in the building, for the use of employees.)
Perhaps the trend of combining the privy and the “rest room” eventually led to the calling the whole area by the term “restroom”. If a lady could say she was going to the restroom, it could be imagined that she intended to rest briefly on the couch there, rather than that she had to “drain her kidney”, as my grandmother would say.
Speaking of my grandmother, she tells me that when she was a teenager, girls did not want boys to ever be aware that they (the girls) had to relieve themselves. They would be mortified to have it known that they were going to use the bathroom (or, more likely, chamber pot or outhouse). She is 87.