This is also why windows has the back slash for file names instead of the forward slash. When dos 1 came out with no directories, the forward slash was used for command line parameters. When directories where introduced in dos 2, the forward slash was already 'taken', so they used the backslash for backwards compatibility.
Any source for this? I see no reason why the same character can't be used in multiple places. Parser should parse the command line until it finds a command, then send the rest of the line to it, regardless of content...
Parsing would be ambiguous, though, as the built-in commands don't require a space before its first argument. So things like copy/y foo bar were (and still are) valid. With directories they would either retain their original meaning, or refer to the y program inside of the copy folder.