Carla Sulzbach, one of my correspondents, sent me many useful links on the topic of why people use "G-d" instead of "God." One of them is a scholarly explanation for why Jews use this circumlocution (and others, like "Hashem" or "Adonai") - an article by B. Barry Levy in the Edah Journal - Fixing God's Name.
She also sent me a couple of references that might explain why some Christian students use "G-d," which point to an origin among messianic Jewish congregations. The two links she sent are from blogs written by people who heartily disapprove of this practice - Philip Johnson and Dan Phillips. These are written by two conservative Christians who think that it's silly, and perhaps even sinful, for Christians not to spell the word with all its letters in English. If you're curious about the theological reasons, read their posts and the comments that are attached to them.