In addition to the all the good reasons cited in the previous answers, I'd like to emphasise the role of the Catholic Church.
When (ca. 496) Clovis, then young king of the Franks, resolved to convert to Catholicism, allegedly under the influence of his wife and Saint Remigius but more probably because he understood what a fruitful collaboration he would inaugurate, he implicitly renounced to impose Old Frankish as the new official language of the Diocese of Galliae (later known as France).
As a result of his own conversion, along with that of his whole army, he secured the support of the Gallic Catholic Church in his fight against the other Germanic rulers who had their eyes set on Gaul, as well as the loyalty of a large number of learned and devoted administrators only too happy to serve him.
These newly appointed administrators, the rest of the clergy, and in their wake the cities and the hinterland just stuck to Late Latin.
There would have been little chance anyway that the invaders could have been able to impose Old Frankish to a Gallo-Roman population 5 million strong as they were counting for less than 5% of its total. They probably did not make any serious attempt to do so anyway but were instead keen to step into the shoes of the incumbent Latin speaking ruling class. What would later become known as France had been Romanised during five centuries (the time separating us from the Tudors) and Gaulish had long been extinct.
A similar phenomenon took place at exactly the same time in Ostrogothic Italy where Theodoric - earlier brought up as a hostage in Constantinople - exerted power surrounded and advised by learned scholars speaking both Greek and Latin as well as in Visigothic Spain where Theodoric was also a regent. In all cases the Germanic ruling class was not only a linguistic minority but also keen to win the hearts and souls of the prestigious local Latin speaking elite.
The prestige factor was actually determinant as well. On the continent, Germanic peoples looked up to the Roman Empire and had no intention to ruin it. Their rulers in Gaul and Italy were eager to slip into the imperial trabea1.
The situation of Roman Britain at the turn of the fifth century stands in stark contrast:
- Its Romanisation was only effective in the cities (esp. the Midlands and London) - most of them garrisons (70 places end in -chester, -cester, -castre and -eter).
- Various Celtic languages were still the main tongue of a large proportion of the low classes.
- The borders with Wales and Scotland were marked by intermittent unrest.
- The proportion of the population of genuine Latin ancestry was fractional.
- The total population the Anglo-Saxon had to subdue was around one million2.
- Above all Late Roman Britain was marked by a revival of paganism3 so that there was no reason for the Anglo Saxon tribes to look for an alliance with a Catholic Church which had little to offer.
- Finally, the occupation had predominantly been a military one. Once the legions had reembarked, the invaded populations looked more like uncouth Celt peasants than polished Roman citizens. The prestige factor thus actually went in the opposite direction: the Celtic upper class soon integrated with the Saxon invaders.
I realise that I've actually explained why Romance Languages survived in the few places where they did but if one takes a broader view, there are actually more parts of the former Roman Empire which did not retain a Romance language. In North Africa and in the Balkans for instance. Not to mention the former Byzantine Empire where Greek was the official language anyway.
Note 1: In this respect, it is worth remembering that the supreme title
Kaiser (and Czar/Tsar) so proudly born by the descendants of
Ariovistus until 1918 (Kaiser William II) is the very cognomen of the Roman General who defeated him: Julius Caesar. And that the phrase "Holy
Roman Empire" designating the German Empire lasted till the beginning of the 19th century.
Note 2: Estimations of 2 millions seem exaggerated - 1/2 million in 650AD.
Note 3: See "Religion In Late Roman Britain" - (Dorothy Watts 1998 Routledge) in particular Chapter 2 "The Revival of Paganism of the Late Fourth Century". [This is just before the evacuation of Britain by the Roman legions].
I don't think the Angles landed in the British Isles and said:
"Let's call our language Ænglisc now that we moved to this new land!"
Before they migrated, and that took many years, their homeland was already called Englaland or even Engla and they already named their Germanic language Englisc. The only difference is that this place was Angeln in the south-east part of Schleswig, in present-day Germany.
So to answer your question, the word English was used before England was called England but at that time the word England (or its ancestor) already existed. It was just used to designate a completely different place.
As for the English people the Angles themselves were collectively referred to as Engelcynn (as in kin) or Engelfolc (as in folk, German volk).
Best Answer
In the journey from Old English to what we write today, the ash (Æ) tended to metamorphose into a simple E and various "ae" forms got reduced to just "e": Ælfwyn became Elvin, Æthelræd became Ethelred, aether and aesthetic became ether and esthetic (except when @Cerb spells them), and so on. The distinction was simply planed off over the centuries. When there was no need for the superfluous Æ (because its sound was rendered with a single letter) it got dialed way down in frequency. The same thing happened, more or less, with the thorn (Þ, þ) and eth (Ð, ð) characters, because the th digraph supplanted them.
An even more obvious influence involved the printing press. In the early days of typography, fonts were imported from Germany and Italy, and those countries did not use the oddball English characters, so substitutes had to be found. "E" substituted quite nicely for the ash, and "Y" for the thorn (as we see on the signs in front of all those cutesy Ye Old Whatever shops).
Elaboration
Asked for citations, I lazily looked to the Web first, but real scholarship in this matter is difficult to Google. Here are some not-stringently-academic citations, together with a disclaimer.
Disclaimer: I feel it only fair to point out that the reference books I have at hand (printed versions, so no linky-link), suggest that the ash (or æsc in OE), was pretty much gone by 1250 due to the influence of Norman French. This was a couple hundred years before the invention of the printing press, so we cannot accept that as the proximal cause. Still, Gutenberg almost certainly put the nail in the coffin of that and the other oddball characters (including wynn and yogh — look those up for your amusement and edification sometime).