I thought this too for the longest time - turns out it's actually not true (assuming Wikipedia is to be believed). There aren't any age restrictions on what can be sold as 'lamb', so most American 'lamb' is what the British would call mutton.
Nevertheless, s0rce is correct on the original linguistic point: that the Norman food-word is "mutton", whereas "lamb" is the Germanic word for the young animal.
interesting, thanks for informing me! I checked wikipedia before commenting but I didn't read far enough, didn't know there was no legislation on lamb age. I wonder how old the "lamb" in the grocery store is? Might explain why there is so much variation in flavor. I can't remember if the lamb was "younger" tasting when I lived in Canada.
