OK, then, so why am I wrong? Let me go over every possible explanation I can think of.
T is an abbreviation for tee. An abbreviation that sounds exactly like the word it abbreviates, eh? That sounds like homonym confusion to me. And that's understandable, considering who plays the game -- 6-year-olds aren't usually up to speed on its and it's either.
And why would we need an abbreviation for a three-letter word? Do you have T-parties? (If you did, incidentally, you might use a "T-ball" -- a perforated metal container that holds loose tea -- instead of a "T-bag.")
Unless you buy the idea that T-ball is "short" for tee ball -- that it's like A-bomb and e-mail -- to write T-ball is as ridiculous as writing of B-pollen, C-water, I-exams, blue J's, taking a P or a pool Q. Phonetic letter and number art is fun 4 U and me, but it isn't the way grown-ups write for publication.
I'm writing this on a morning when my newspaper, The Washington Post, is publishing a front-page story about President Bush's White House tee-ball game. My colleagues, following Webster's New World Dictionary, used "T-ball." I can't blame them. Absent an emergency meeting of the style committee, that's what they were bound to do. No, my quarrel is with the dictionary people. I know that dictionaries are supposed to reflect usage rather than dictate it, but when there's a split in popular usage, why not reflect the literate choice? Well, at least it isn't "tball." Not yet, anyway.
This episode would have been a lot easier to swallow, though, if our "T-Ball" headline hadn't appeared above a photograph of the ticket to the game, which reads "Tee Ball." You're in trouble when you lose a spelling bee to Dubya. (Or should that be "spelling B"?)
Addendum: C-SPAN also got it right.