She had it patented and people LOVED it. I mean, have you seen pictures from the '80s?!
The patent was later licensed to Scunci International, where they altered the name to include a diaeresis over the "ü." However, people eventually started calling the "Scünci" a "Scrunchie" because — you guessed it — the fabric scrunches up! Scunci International has claimed it was a natural evolution. So, there you have it. That's why we call the "Scünci" a "Scrunchie."