The outbreak of the First World War brought the UK (like many other countries) to a fever of jingoism which manifested itself in outbreaks of sometimes violent and irrational anti-German sentiment. There are reports of shops in the East End of London owned by people with German-sounding names being trashed and people being attacked for owning dachshunds. Inevitably there was a fit of patriotic de-Germanification of names; the royal family, the house of Saxe-Coburg-Gotha led the way by becoming the Windsors, and their relations the Battenbergs translated themselves to Mountbatten.
Inevitably, the many owners of German Shepherd dogs could not happily look their beloved and noble pets in the face if they were somehow linked to the Hun, so, seeking to maintain some vague kind of geographical integrity they picked upon the disputed territory of Alsace (or Elsass if you were German, or Alsatia if you are Webster 1913), taken from the French by the Prussians after the war of 1870, the recovery of which terra irredenta was one of France's main war aims; the dogs of Britain and its Empire too were reclaimed for all that was good and right by being retagged as Alsatians.
As the USA was, as was once its wont, rather slow to get involved in the war, it missed the extremes of hysteria of the first days of the war in Europe, so German Shepherds in America stayed that way. In Britain, however, where anti-German feeling remained stronger after the war, the label stuck, and Alsatians continue to be known by that name in Britain and parts of the Commonwealth to this day. Somehow Rottweilers, Weimaraners, Dobermanns, Dachshunds and Schnauzers managed to carry on as they were, and, ironically, in the fields and cities of Alsace, now restored to French rule, the dogs were called as they always had been: les bergers allemands.