"Y" or "IE" why is it so?

Back-derivation is a common enough process. That is how we got pea. Originally peas was the only form of this word. It was in a class with oats, greens, collards: it had no singular. The final S was simply coincidental but it looked suspiciously like the plural -s and, since peas was (!) made up of small, countable object, the S was removed and the remainder was used as a singular: one pea.

The process is going on very productively today in words that end (or ended) on the suffix -y which changes to -ie before the plural -s: cookies, brownies, biggies, lefties—even hobbies. This is just the tip of the proverbial iceberg. The singular of all these words originally ended on -y but massive back-derivation has converted a large number of them to words like cookie and brownie which are only spelled with the -ie ending now. Hobbie is just beginning to rear its ugly head.

Source Dr. Goodword’s Language Blog » Spelling
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-y, -ie
[diminutive] suffix in pet proper names (e.g. Johnny, Kitty), first recorded in Scottish, c.1400; became frequent in Eng. 15c.-16c. Extension to surnames seems to date from c.1940. Use with common nouns seems to have begun in Scot. with laddie (1546) and become popular in Eng. due to Burns' poems, but the same formation appears to be represented much earlier in baby and puppy.

Source http://www.etymonline.com/index.php?l=y
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