"Hot Shit" and "The Shit" both originated as inner-city terms to describe high-quality people, women, items or drug substances. IE, "this joint is HOT Shit."
The terms Hot Shit and The Shit are both very interesting oxymorons. The amusing part of it is that without "Hot" or "The", an entirely different meaning applies. For example: His shirt is "shit" = an ugly, crap shirt. -VERSES- His shirt is "hot shit" = a kick-ass, awesome shirt. The words "hot" and "the" denote the superiority.
Allison - "Hey, Afton, where did you get that Hot Shit T-Shirt with that nasty-cool "Fuck The World, I Eat My Sister" artwork on it?"
Afton - "What? Don't you know, Allison? Everybody who's rude-cool and halfway-hip gets their t-shirts at "World Famous" Evan Steel's HotShitShirts.com!"