The emergence of the soft C sound is actually a relatively modern phenomenon in comparison to the rest of Latin orthography. C is always a hard K in Classical Greek and Latin except in cases where a later pronunciation became widely accepted. Caesar's name would have been pronounced with a hard C in his lifetime (making the German 'Kaiser' actually closer to the original pronunciation).
As for the K in knack or knife, they were pronounced in old English, which was closer to Scandinavian and Germanic languages of the time. English pronunciation has changed considerably, heavy French influence being the most notable shift.
Psychology, pterodactyl and pneumonia are not native English words, they come from Greek and follow conventions for Greek transliteration.
English spelling in the Latin alphabet as it stands is actually reasonably reliable if you can make an accurate guess as to the origins of the word, which isn't too hard with a bit of conscious practice. You really only need to know English, French, Latin, and Greek spelling conventions to cover >90% of the words you'll see.