Well I think it worked something like this. The Internet was initially an American phenomenon, and the .com = commercial .org = non-profit organisation .gov = government etc. TLDs were invented.
When it occurred to them that other countries not only existed, but might like to join the party, and the World Wide Web became a reality they agreed that the United Kingdom was such an important place (like an outpost of America really!) and we were given the same TLDs but demoted behind a new country TLD .uk. At the same time the .com was shortened to .co so as not to confuse anyone. (hahaha)
I think they also anticipated that the UK would generate lots of Web sites so that www.blah-blah.co.uk would not be the same as www.blah-blah.org.uk so we could have many more Web sites. That's why businesses (like the mythical, I hope, Blah-Blah company) now register loads of possible .org, .net, .com, .co.uk, .org.uk and so on and so on. Clever, wasn't it?