the substitution of UE for Ü is certainly not a recent development. In the old German Fraktur typeface (and the old German hand wring) there existed no capital "umlaut"-letters. Capital ä was written Ae, capital ü Ue, etc. Capital umlaut were introduced to German with the antiqua typeface. In Switzerland however people kept writing Ue for Ü, because on the Swiss typewriter layout was, due to the French symbols, no space for capital Umlauts. This only changed when typewriters were replaced by computers. This is way Swiss streetnames beginning with an umlaut are normally written in the two letter form.

Regarding the inscription of the keys, there are different possible explanations for the U. I think the reason that there is no Ü could be technical (i.e. the machine used to make the inscription was not able to make capital umlauts). Maybe ZURICH was considered to look neater than ZUERICH, as the Ue normally was only used at the beginning of words.

Another possibility is that if Bauer (now KABA) thought, that writing ZUERICH could have caused confusion with costumers outside the German speaking areas. Remember, that Zurich is both the French and the English name of Zürich.