It's perpetuated by several of the more traditionalist churches nowadays actually, I've known people to think that the original writings were in Latin too. It's silly really, because none of the formal translations have any significant differences, but people will claim they do anyway.
On a more interesting note, in middle English "thee" and "thy" is the informal of "You". In modern English we don't really have informal pronouns. The interesting thing is that God is always referred to in the informal "familiar" sense in the biblical texts. He is never referred to in the same vaunted terms as intellectual or politicians love, but as a simple family member.
-edit-
Also, if somebody doesn't make at least ONE Kevin Smith reference I am disappoint.

