It's one of the silliest euphemisms for female genitalia-- and also my favorite (except when I'm in the hood where I revert to using "nappy dugout").
Why this term of endearment? I just like the way it sounds. I like that P-word better-- you know, 'pussy'-- but the p itself makes this word a harder pill for others' ears to swallow. (I have a female friend who hates to hear me say this word. 'Vagina' sounds fine but...)
Some women say it's debasement for men to call a vagina out of its name, but technically it's not a person-- it doesn't have a brain per se. And thank God for that! If that monkey spent all day talking-- the way some women do-- you'd never be able to shove a banana in its "mouth."