How did おめでたい come to mean “idiotic”? is it slang?

@ericaw
It’s not slang but just a derogatory sarcastic expression.

めでたい means “so fantastic and should be celebrated or highly praised”. おめでたい人 is a person who always sees everything positive and easily becomes happy. Such a person cannot see things from different perspectives and not take into account potential risks or side effects.

お + characteristics + 人 is a frequent pattern. You cannot drop お because it’s not a prefix for polite expressions. I’ve explained the similar case by introducing some example sentences here:

あいつはおめでたい人間だ is interchangeable with:

あいつは頭がお花畑だ (あたまがおはなばたけ)

花畑 is a flower garden. Flowers make you happy and peaceful. 頭がお花畑 is “the brain of the person is like a flower garden”. So, the person is too optimistic and cannot see things realistically.