In the late nineteenth century and early twentieth century, the words “health” and “medicine” were synonymous. The so-called “Four Horseman of Fitness” were the dumbell, the indian club, the wand and the medicine ball. This is where the beginnings of the modern medicine ball originate

From: http://wiki.answers.com/Q/Why_is_a_medicine_ball_called_a_medicine_ball

There you go! I’ve learnt something today too!