The best theory I have heard comes from Romilia Thapar's History of Early India saying that it was basically a method of social distinction adopted by brahman in the early historic period (starting around 500 BCE) that defused into the rest of society with the bhakhti movements starting in the seventh and eighth centuries.

Starting from the beginning, during the Vedic period there was no prohibition on eating cows. In fact, there are passages in the Rid Veda that portray the communal feasting on cows as being an important social ritual. This makes sense from a comparative perspective, as cows and feasting on cows seem to be an important part of many different Indo-European cultures, as can be seen with, say, traditional Irish cow stealing stories. So it is important to note that this particular taboo is far from timeless.

Fast forward to the early Historic Period, where you see the development of states along the Ganges an the gana-sangha on the periphery. This is probably an oversimplification, but broadly speaking these developments brought a great deal of social change and eroded the traditional position of the brahman in society, and so the brahman needed a way to separate themselves from the rest of society as traditional ways did not work as well. One way to do this is the adoption of vegetarianism and particularly abstention from beef as a sort of tangible proof of their greater holiness. Others wanting to emulate them may also join in these abstentions, but it was far from universal.

During the Medieval Period there begins to develop a sort of "India consciousness", particularly with the more or less completed conquest of the south by varna (mainstream cultural) society. One result of this is the so-called Bhakti Movement which started in the south, possibly as a fusion of native and north Indian spirituality, as well as some good Buddhist egalitarianism. This is basically the idea of devotion (bhakti) and personal relations to a or the deity is the path to moksha. The Hare Krishna movement is probably the most familiar example to those in the West, but in India I believe Shaivism is most well known. Anyway, the biggest effect of this is that brahmanical ideals began filtering through to the rest of society, one of these being vegetarianism and particularly abstention of eating cattle.

I would also suspect that it would later become a way of separating Hindus from Muslims, but I'm not as familiar with that.

I'm not an historian, but I do have some insight from the social sciences perspective. This information comes from "The Cultural Ecology of Sacred Cattle" by Marvin Harris (1966) which can be found here.

Essentially, Harris argues that it comes down to three key factors.

1. Oxen are very commonly used for farming in India. Cows then can act as biological tractor factory producing much needed working animals for farming in India (in which there is a regular shortage of working animals amongst farmers).
2. Milk production.
3. Cow manure has many uses (from flooring to cooking/heating fuel to fertilizer).

To quote from here: "The religious ban on killing cattle and eating beef arose to prevent the population from consuming the animal on which Indian agriculture depends. During the First Millennium B.C., the Ganges Valley became one of the most densely populated regions of the world. Where previously there had been only scattered villages, many towns and cities arose and peasants farmed every available acre of land. A population expert at the University of California at Berkeley, estimates that by 300 B.C. between 50 million and 100 million people were living in India. The forested Ganges Valley became a windswept semi‐desert and signs of ecological collapse appeared; droughts and floods became commonplace, erosion took away the rich topsoil, farms shrank as population increased, and domesticated animals became harder and harder to maintain.

It is probable that the elimination of meat eating came about in a slow, practical manner. The farmers who decided not to eat their cows, who saved them for procreation to produce oxen, were the ones who survived the natural disasters. Those who ate beef lost the tools with which to farm. Over a period of centuries, more and more farmers probably avoided beef until an unwritten taboo came into existence."