It is sort of a legacy term I guess, but I see it like the evolution of any other language. What else would you call the extremely common video game cliche of having a particularly strong enemy at the end of levels? It's just "boss." The word "boss" means that now. In fact, I'd say the word is common enough in our overall language that the dictionary is being negligent in not including this definition of the word "boss."
(Other video game words that are funny if you break them down: enemy, level)