http://www.dailykos.com/story/2011/06/24/988244/-SPAM-or-We-re-Having-What-for-Dinner-
According to Wikipedia, SPAM started life as "Hormel Spiced Ham." (Spiced with what, one wonders.) In 1937, as Hormel Supposedly Spiced Ham began to lose market share, Hormel held a contest to rename its product. A company official claimed the winner was "Spam," for "Shoulder of Pork and Ham." Some sources say it's actually from "Spiced Meat and Ham." In Britain, the meaning of the name is said to vary from "Specially Processed American Meats" (as opposed to those American Meats processed any old way?) to "Supply Pressed American Meat," and comes from the war effort of the 1940s.
Some of the better nicknames for SPAM: "Something Posing As Meat", "Specially Processed Artificial Meat", "Stuff, Pork and Ham", "Spare Parts Animal Meat" and "Special Product of Austin, Minnesota."
During World War 2, fresh meat was hard to get, especially to soldiers serving in the Pacific Theater, but also worldwide. As noted above, it was imported to Europe and the United Kingdom; it was brought to Hawaii, Guam, Saipan, Okinawa, and the Philippines, where soldiers called it everything from "ham that failed its physical" to "meatloaf without basic training." In Hawaii, it's immensely popular; Burger King actually started selling SPAM in 2007 solely to compete with all the McDonalds' that have been doing so for years!
But thanks to wartime conservation, and the recession in America that followed, SPAM is still known as the fake meat you buy because you literally can't afford to buy anything else.