I heard they wanted to use the ps extension but that has long been used for PostScript, and though very few Windows users use PostScript files directly they still didn't want to step on those toes. Particularly, they were very cautious about using anything that looked like an existing file extension because they didn't want it to be an easy vector for malware to confuse users. ps1 doesn't step on any toes, at least, and looks weird enough to an average computer user that they might hesitate to double click one.