I haven't read yet the whole vast flurry of responses to this query, so I
apologize if the following was covered already. Here is a little history.

The "varietal" labeling now taken for granted by some US wine consumers was
a new idea proposed after the repeal of Prohibition in the US. Schoonmaker
and Marvel in their seminal 1941 book _American Wines_ (Duell, Sloan and
Pearce, New York) advocated varietal labeling as a pragmatic alternative in
the absence of the established and understood place-based naming common in
other, older wine-producing regions. (Elin McCoy in her recent book
mentions Schoonmaker and Lichine's coinage of the term "varietal" .) If
honestly used, this could also build respectable US wine identities, unlike
the very loose "generic" marketing names then routine on US table wines.
(Note also that when Schoonmaker and Marvel wrote, only one quarter of US
wine consumption was tables wines; three-quarters was sweet fortified wines
at 18-21 percent alcohol, a residue of tastes during Prohibition.)

Even varietal labeling had its limitations at the time, as those authors
pointed out:

"A label is submitted and approved for a California wine made from Riesling
grapes: the Federal Government does not know and is apparently in no
position to find out, whether this wine was made from Riesling grapes or
from Thompson's Seedless. If not made from Rieslings, the wine may have been
made and the labels ordered by a grower who is convinced that his grapes are
Rieslings ("Father always said that the grapes in the north forty acres were
Rieslings") or by a grower who is committing a deliberate and conscious
fraud. The Treasury Department apparently believes, and far too many lay
citizens also believe, that it is possible to make people honest and
intelligent and well-informed by publishing a book of regulations or passing
a law."

-- Max