Some people say that the letter 'I' continues to be capitalized because it is the only single-letter pronoun.

But the history behind this is that like all other European languages, five or six centuries ago, this pronoun in English was not capitalised. In fact, there was a time when this pronoun was pronounced and spelt like the German word for ‘I’ — ‘ich’. With the passage of time, however, both the pronunciation and the spelling of the word gradually changed — from ‘ich’, it became ‘ic’, and then later, ‘i’. Once the word was reduced to a single letter, the uncapitalised ‘i’ caused many problems. Readers found it strange to come across a single letter word in the middle of a sentence. Scribes and printers worried that when written separately, the single letter would attach itself to the word before it or after it — thereby, creating more problems for the reader.
In order to overcome this problem, writers like Geoffrey Chaucer, the author of the Canterbury Tales, adopted different techniques to highlight the ‘i’. He chose to make it larger than the other letters in the same line — something which all writers and printers were already doing when ‘I’ occurred as the first word in a sentence. Eventually, everyone chose to capitalise the word.