why do we say "too bad"?

At first glance you'd think the correct use of the expression "too bad" would be in a conversation like this:

Sure stealing candy would be bad but stealing candy from a baby is just too bad.

But instead we more often use the expression either sarcastically in cases like this:

Yeah, I got it first! Too bad. You lose.

or as a synonym for "unfortunate" such as in:

It's too bad that you can't come to the party.

But why did we come to use "too bad" in this way that seems to be little related to the literal meaning of the words?

Solution 1:

Dictionary.com lists five definitions for the adverb too:

1. in addition; also; furthermore; moreover: young, clever, and rich too.
2. to an excessive extent or degree; beyond what is desirable, fitting, or right: too sick to travel.
3. more, as specified, than should be: too near the fire.
4. (used as an affirmative to contradict a negative statement): I am too!
5. extremely; very: She wasn't too pleased with his behavior.

I would say your first and second examples fall under definition 2, although the second example is clearly sarcastic in tone.

While your third example isn't exactly the same, I would say it falls under sense 2 as well, or even 5. It's not quite idiomatic to say it's very bad that you can't come to the party, but, essentially, that's the meaning of the phrase too bad: very bad, unfortunate, a bummer.

In short, I don't agree with the premise of your question. The phrase too bad is used in a way that is connected to the literal meaning of the words too and bad — at least it is in the examples you cited.

Solution 2:

Bad can means "wicked", but it also means "unfortunate". To say "too bad" to mean "regrettable", whether sincerely or not, is in line with the sense of "unfortunate". It is odd that "too bad" only picks up on the "unfortunate" sense. See below, though, for some quotations from OED of "too bad" used with senses of bad other than "unfortunate".

If the ache gets too bad you can come up to Green Gables and tell me your thoughts.

This crack army o' Joshua's..walk around, blowin' horns... The way they blow on them is too bad. [meaning they are good at playing the horn]

We might help some people who are hooked in gangs and selling drugs who think they're too bad and it won't happen to them.

I had my first exam today! Didn't do too bad.

They prefer, when the nominations are not too bad, to vote the regular ticket.

Solution 3:

In your example too bad is used to mock the counterpart.
Consider it in two parts:

Yay, I win!

Too bad that you lost :(
followed by a silly victory dance

While being a sarcastic/mocking saying, it's rarely being used in a mean way, though.
When used casually, it delivers your recognition of the work that has been done.

Good job would be a more polite/informal way to express those thoughts.