This ambiguity is documented at least back to 1984, by IBM, the pre-eminent computer company of the time.
In 1972 IBM started selling the IBM 3333 magnetic disk drive. This product catalog [0] from 1979 shows them marketing the corresponding disks as "100 million bytes" or "200 million bytes" (3336 mdl 1 and 3336 mdl 11, respectively). By 1984, those same disks were marketed in the "IBM Input/Output Device Summary"[1] (which was intended for a customer audience) as "100MB" and "200MB"
0: (PDF page 281) "IBM 3330 DISK STORAGE" http://electronicsandbooks.com/edt/manual/Hardware/I/IBM%20w...
1: (PDF page 38, labeled page 2-7, Fig 2-4) http://electronicsandbooks.com/edt/manual/Hardware/I/IBM%20w...
Also, hats off to http://electronicsandbooks.com/ for keeping such incredible records available for the internet to browse.
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Edit: The below is wrong. Older experience has corrected me - there has always been ambiguity (perhaps bifurcated between CPU/OS and storage domains). "And that with such great confidence!", indeed.
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The article presents wishful thinking. The wish is for "kilobyte" to have one meaning. For the majority of its existence, it had only one meaning - 1024 bytes. Now it has an ambiguous meaning. People wish for an unambiguous term for 1000 bits, however that word does not exist. People also might wish that others use kibibyte any time they reference 1024 bytes, but that is also wishful thinking.
The author's wishful thinking is falsely presented as fact.
I think kilobyte was the wrong word to ever use for 1024 bytes, and I'd love to go back in time to tell computer scientists that they needed to invent a new prefix to mean "1,024" / "2^10" of something, which kilo- never meant before kilobit / kilobyte were invented. Kibi- is fine, the phonetics sound slightly silly to native English speakers, but the 'bi' indicates binary and I think that's reasonable.
I'm just not going to fool myself with wishful thinking. If, in arrogance or self-righteousness, one simply assumes that every time they see "kilobyte" it means 1,000 bytes - then they will make many, many failures. We will always have to take care to verify whether "kilobyte" means 1,000 or 1,024 bytes before implementing something which relies on that for correctness.
Here's my theory. In the beginning, everything was base10. Because humans.
Binary addressing made sense for RAM. Especially since it makes decoding address lines into chip selects (or slabs of core, or whatever) a piece of cake, having chips be a round number in binary made life easier for everyone.
Then early DOS systems (CP/M comes to mind particularly) mapped disk sectors to RAM regions, so to enable this shortcut, disk sectors became RAM-shaped. The 512-byte sector was born. File sizes can be written in bytes, but what actually matters is how many sectors they take up. So file sizing inherited this shortcut.
But these shortcuts never affected "real computers", only the hamstrung crap people were running at home.
So today we have multiple ecosystems. Some born out of real computers, some with a heavy DOS inheritance. Some of us were taught DOS's limitations as truth, and some of us weren't.
However it doesn't seem to be divided into sectors at all, more like each track is like a loop of magnetic tape. In that context it makes a bit more sense to use decimal units, measuring in bits per second like for serial comms.
Or maybe there were some extra characters used for ECC? 5 million / 100 / 100 = 500 characters per track, leaves 72 bits over for that purpose if the actual size was 512.
First floppy disks - also from IBM - had 128-byte sectors. IIRC, it was chosen because it was the smallest power of two that could store an 80-column line of text (made standard by IBM punched cards).
Disk controllers need to know how many bytes to read for each sector, and the easiest way to do this is by detecting overflow of an n-bit counter. Comparing with 80 or 100 would take more circuitry.