I'll take the bait, and offer the defense that both are diminutives; one from petroleum, one from gasoline. I'm not sure which word came first, but Americans didn't just switch from 'petrol' to 'gas.'
(Not that I agree about the 'merits' of natural language development. If it's Eis, it's Eis.)
The correct word should be "iced cream."
Not unless you're a 300-year-old vampire rising from his coffin:
The -ed ending dropped off in about 1744.
The expression in today's English is "ice cream".
Where I am (Japan if it's important) ice refers to not just ice cream but is a catch-all term including popsicles/ice lollies, flavored/flavoured shaved ice, and whatnot more like frozen treats, well any that melt. Shall we assume the same is going on in Europe?
Since ß makes a ss sound how can the difference be recognized?
The difference between ß and ss in spelling is very easy since 1996 if you know the correct pronunciation of the word: ß only comes after long vowels and diphthongs, ss only after short vowels. For example, Buße "penitence" versus Busse "busses", since the first word has a long vowel, the second one a short one.
More difficult is the difference between ß/ss and s -- that just has to be learned. For example, das and dass are pronounced identically.
Eis is capitalised because it's a noun. All nouns are capitalised in German.
This fact is mentioned in the very first paragraph of the tips and notes for the very first lesson: https://www.duolingo.com/skill/de/Basics-1
You may want to review the tips and notes for the other lessons you have already done. (Tips and notes are available on the website but may not be available in the mobile apps; I'd recommend using the website to learn new material, not an app, for this reason.)
In English you normally see the one word icecream not ice cream. Ice cream would be cream that was icy rather than an edible icecream. But hey ho this programme uses American English so I guess Americans also so ice cream for icecream. So I will ignore being told off for missing a space in the word icecream as for me, it is one word. Isn't it great that Germans just use the word Eis.
I have a friend who asked for ice water at a restaurant in Germany. The waiter was shocked and asked my friend to confirm, then he brought him a glass of water with a scoop of ice cream in it. OK, Eis means both ice and ice cream, but which one do you think he more likely wanted in his water?
Funny story- years ago, a good friend of mine was motorcycling in Germany after traveling there to collect her BMW motorcycle she had custom ordered. While on the road she encountered a hornet that got inside her leather jacket and stung her with enthusiasm. Going half mad with the pain, my pal pulled into a roadside cafe truck stop sort of place, and asked urgently for “ Eis, bitte!” They cheerfully brought her ice cream... which she ate after getting the other kind of ice and shoving a bag of it inside her jacket.
Which is why I have never forgotten that there are two meanings for Eis!