I've done a fair amount of research on this and I'm still not sure I have it completely accurate, but we'll give it a spin and see how it goes.
All-American status appears to have begun in 1910 and athletes were selected based on their performance for the year by an officer of the AAU. This seems to have lasted until 1921 which is also the first year that the NCAA conducts it's first national collegiate meet (see IC4A link).
From 1921 to 1924 there is no All-Am honor bestowed on athletes by the NCAA. In 1925, a Collegiate Honor Roll award is started recognizing those athletes with the best performance for the year. Times and marks were submitted by coaches and the NCAA T&F Rules Committee would select this Honor Roll team. This Honor Roll selection process would last until 1962.
In 1941 an All-American College Team was created along side the Honor Roll Team (selection was by the same rules committee). This All-Am Team selection would last until 1974 and would be a tad more selective as it recognized fewer athletes than the Honor Roll selections. Somewhat of an oddity is that during this time period there would be years when both an Honor Roll and an All-Am Team were selected. And then some years one or the other team was selected. I could not find any explanation for this.
1975 appears to be the start of the practice of awarding All-American status to athletes based on their placing at the National meet. From 1975 to 1981, the top 6 places would earn All-Am status (or the top 6 American athletes factoring in Americans being displaced by foreign athletes competing in American schools).
1982, 83, and 84 introduced a scoring format that was quite generous as the top 12 places scored in the National meet those years and as such, the top 12 places were awarded All-Am status. If you look at the results from those years, you'll see how bizarre it was. (EDITORIAL GUESS: 1982 was the first year of the women's meet under the guise of the NCAA and combined with the men for one big meet, hence this scoring format.) (Quick overview re: women's athletics)
From 1985 to 2010 scoring and All-Am status was expanded to the top 8 places (or top 8 American athletes).
In 2011, a 1st Team (pl. 1-8), 2nd Team (pl. 9-16), and Honorable Mention Team (pl. 17-24) All American status was introduced and that's where we're at today.
If you run across any errors in my narrative here, please drop me an email: email@example.com