Cisco has a deployment page that illustrates this. The problem comes from having the center frequencies on 5kHz separation, but with 22MHz wide passbands. Normally, in a radio frequency assignment plan, you have for example a 12.5kHz passband and channels on center frequencies every 12.5kHz. Adjacent channel interference usually means you assign out every other channel in a local area, unless the spectrum starts getting crowded.
Because of the insane amount of overlap on 802.11, in a close area, say a warehouse, you can only use 1, 6, 11 without adjacent channel interference. Down the street where the signal falls off, someone else could use channels 2 & 7 simultaneously, a little further on, 3 and 8, and so forth.
As to the reason for the overlap, I'm guessing that they had too much faith in their spread-spectrum modulation scheme they were using when the specs were created.