Because the name was changed from something else long after the neighborhood changed.
According to Wikipedia, "Grove Street, which stretched for several miles north from Downtown Oakland into North Berkeley, was renamed Martin Luther King Jr. Way in 1984. The street had once represented the dividing line between neighborhoods where minorities could and could not live or buy property."
A SF Chronicle article states: "During the 1950s and '60s the street served as a de facto color line, with minorities living on one side and whites on the other."