Well, Shigeru Miyamoto never liked the name Toadstool, so they decided to just name her by her first name.
Game Theory:
The Princess was a damsel in distress. She liked to be thought of as royalty, but when she started participating in events such as Mario Tennis, Mario Golf, Mario Party, etc. She just wanted to be thought of as a normal person, so she asked everyone to call her by her first name, and now it sticks!
I call her Peach all the time now. It's short and convenient, and it's nice to write "Peach" then spend an hour writing "Princess Toadstool" in a fanfic. Peach all the way!