The Emerson Web site didn't say that EKI responded to a Request for Proposal, the usual mechanism for letting government contracts. It also didn't indicate that EKI was submitting knives for competition with other vendors (a fact that would have given the company crowing rights, since it won the contract). Combine that with the fact that NASA went to Emerson, not the other way around, and that leaves only one option that I'm aware of: Emerson Knives Incorporated was a sole-source provider, which means that, for one reason or many, NASA wanted what EKI was offering, to the exclusion of every other manufacturer.
The SPECWAR was not new old stock in 1999. It was a recently introduced knife. And as you pointed out, the knife industry was quite different then. The use of aerospace-grade G-10 and titanium was not common, and among commercial knife manufacturers it was downright rare. 154CM, while scoffed at now, was a premium steel at that time. If NASA did have strict requirements for size, weight, materials, strength, and ergonomics (and JB's example of carbonized rayon procurement is only one of hundreds that show that the organization has extremely stringent standards for absolutely everything that goes up), then Emerson was a great choice in 1999.
I don't care if you have an unfavorable opinion of Emerson Knives, as I have no vested interest in EKI or any other company. But no matter what you or anyone else here says to minimize its significance, it's a big deal to have a knife selected for use aboard NASA's manned space flights and the International Space Station. Is it enough to declare the company's owner an icon? By itself, maybe not. But in conjunction with everything else Emerson has accomplished, it helps to make a pretty compelling argument.
-Steve