This controversial term dates back to Richard Brome's 1588 comedy 'the Court of Malcontents'
In Act I Scene II, the following takes place:
Don Benedicto: Aha! and from whence hast this bough sprung?
Don Matheus: From the douche, no doubt!
Don Benedicto: The douche. The douche. Ye Gods man!
Tell me from whence hast the douche come ye can
Don Matheus: The douche is borne from yonder douche-bag.
Don Benedicto: Your humour does not humour me, sir. Begone or taste my steel.
Don Matheus: Thou steel be brittle, sir.
This pun is lost on most modern audiences, but in the play leads to Don Matheus and Don Benedicto fighting a duel (during the Edwardian period the word 'steel' would be pronounced very similarly to the word 'still', which then was used to refer to the way in which a mother holds her child. Don Matheus is implying that Don Benedicto's mother was incompetant. Indeed, he even goes as far as to suggest that Don Benedicto was dropped on his head at an early age, insulting both Don Benedicto's honour and intelligence).
'Douche' was a form of the old english word 'Douaché' meaning 'I sow'. It came to mean the seeds which farmers used to grow orchards (often apple orchards particularly). A douche-bag was a sack slung over one shoulder used to carry the 'douche' during sowing.
After this play, douche-bag eventually came to be associated with simpletons or fools (as it is the 'final straw' as it were of Don Matheus' ridicule which causes Don Benedicto to initiate a duel, which he eventually flees from - losing all face and honour as a gentleman).
This Elizabethan insult has in recent years resurfaced, particularly in the Americas, and has rapidly spread across the rest of the world thanks to recent innovations in communication technology.
Don Byrne: Thou is naught but a lowly douche bag.
Don Sampson: I think not sir!