I did always wonder about that name. My guess is some other aliens had already established trade with the Wookies and Kashyyyk, in their language, meant something like third-planet-from-the-local-sun. Either that or someone invented a phonetic system for Wookie using letters already in use ("k" represents "grr!" "K" represents "GRRR!!!"). So, people who don't get out the "what this letter means in Wookie" guide just try to say it with the sounds those letters mean in their language.

Of course, no one's proven anyone in the Star Wars galaxy can read (I thought that would change when they brought up the Jedi books in the last movie, but Luke hadn't read them. It's not clear if he didn't or couldn't. Yoda probably could, since he said page-turners they were not, but kids who can't read often try to cover by saying they didn't read something because it was boring. Maybe 900 year old Jedi do the same thing.