In FFVII, Sephiroth, Zack, and others are called SOLDIER, not soldier. And no one has ever wondered if SOLDIER is an acronym, so why is everyone wandering if SeeD is an acronym? I can imagine they write SeeD instead of Seed so that the term becomes noticeable. If somone just saw the word Seed (that would have to be at the beginning of a sentence) they might just overlook the work, but SeeD is noticeable no matter what.