I read it this way too. It’s like how your biggest friend might be nicknamed Tiny

I don’t know that you can pin down the origin, but a quick search suggests it was early 20th century American English. That makes sense to me, it sounds like the sort of slang I’d hear in an old gangster movie

If you updated the slang for modern times I don’t know if it would have the same impact. If somebody told me I had a dummy thick chance, I’d think my odds are pretty good