Iguanas are reptilian, leathery, kind of grumpy and evil-looking (albeit awesome).
A fluffy iguana thus seems like an odd contradiction. Kind of like being an agnostic atheist Jew.
Also, cookies are yummy.
Mostly, though, it's suddenly become the favored term for "the best possible thing ever" on my favorite blog, Slacktivist. And somebody suggested it should be used as a blog title or band name, and, well... I pounced first.