Green is used in hospitals and prisons (especially on death row) and does calm people down.

That probably was the rationale at the time (not sure about cockpit interiors though), however it looks like those ideas were ill-founded:

The research indicating that red incites aggression, green is calming, and yellow stimulates the intellect is simplistic and outdated. Hundreds if not thousands of schools, hospitals, and prisons were painted light green (thought to induce calm) in the middle of the twentieth century, with the result that this perfectly good color family was tainted as an institutional kiss of death by the 1980s and ’90s. When the spectrum is used thoughtfully, all colors have a place for learners of all ages.

http://www.edutopia.org/magazine/ed1article.php?id=Art_1474&issue=mar_06