The first time I saw it was a year ago on DailyKos. Since then I've seen it popping up in pop culture. I don't know where it started, but I thought it started there as a post timeout error sould return a simple "fail" statement. Of course, somewhere along the line people started saying "Epic Fail". I don't know from whence it came.

It's a shibboleth. Like any other slang, it's meant to separate those who know from those who don't. If you want to know and take the time to learn, you are part of the group. If you refuse to learn and accept it, then you are an outsider. Glory in that if you want, but the fuddy-duddies will eventually pass on and the n00bs will inherit the earth and do with it as they please.

__________________
"What you think you thought you saw you did not see." Agent J, MiB - Manhatten Bureau