The way I remember it, the Ethereal plane overlaps the Prime Material, which is why ethereal characters can maneuver through the Prime Material. As such, one must retain a certain amount of ability to perceive the Prime Material while ethereal.
The Ethereal plane is so-named after a very old theory of "ether" (also Æther *grins*) which was a substance that filled the empty spaces between matter, including the vast reaches of outer space. It was also theorized as the medium through which radio transmissions traveled.
Granted, I haven't cracked the Manual of the Planes in well over a decade, so consider this post flavor and possibility, but not necessarily the truth.
