- It is primarily a right-wing attempt to smear a Latino candidate by raising a meme that is very closely related to the "They Keep Coming" tradition of GOP attacks on Latinos for political gain by insinuating that Latinos are mounting some kind of attack on Californians' pocketbooks, racial purity, and borders. (By the way, American Patrol mounted a similar attack on LA mayoral candidate Antonio Villaraigosa in 2001.
Historically, though, the meme goes back even further than 1996, to at least 1993, when I first heard (and ignorantly repeated) the accusation while a freshman at an Orange County, CA high school. Our school, which was roughly 40% Latino at the time, had a MEChA club on campus that was quite popular. I recall discussions with other conservative friends and they explained to me that MEChA was racist, because it excluded whites and sought the return of the lands lost in 1848 to Mexico. Where these friends picked up the meme is a mystery to me, but I can only assume that if it was already formed in 1993, its origins must have been no less than a year old then.
Proposition 187 is what mainstreamed the meme and its associated anti-Latino politics. (It was also what began my turn against conservatism, shocking me with ts open racism.) MEChA became a convenient example to those who claimed that California was being invaded by Latinos who wanted to leech off the public teat and retake American lands for a foreign country. As MEChA is primarily a campus organization, it also fit neatly into the right-wing critiques of political correctness and multiculturalism, high-profile arguments in the early 1990s. MEChA thus became a symbol, along with the Mexican flags at anti-187 rallies, of the supposed reality of the threat Latinos posed to the white middle class, and of the need to enact Prop 187 (which passed by a sizeable majority).
There are a number of complex sources of the meme, I think, including issues of spatial control as well as standard white backlash against immigrants, as well as suspicion of minority rights groups. What is important to know is that the meme is intricately bound up in right-wing anti-Latino politics in California. It will continue to be repeated so long as the Latino population continues to grow and folks like Pat Buchanan theorize about the Golden State becoming a part of the Third World (which is a distinct possibility, but it would come about as a result of an inability to maintain first-world levels of public services as a result of free-market economics, not because of Latino immigration).
The irony is that the louder these sorts of attacks become, the more galvanized Latinos will be to show up at the polls and ensure that if Gray Davis is recalled, Cruz Bustamante will be his successor -- especially with Ward Connerly's Prop 54 on the ballot, another attack at minorities in the vein of 187, 209, and 227.
The Daily Kos has already observed that the GOP's embrace of the MEChA smear is a nice recipe for the party's long-term marginalization in California. I might note that this extends to the broader national scene as well: Other southwestern states, including Texas, are likely to be dominated demographically by Hispanics in the next 10 years or so; and even in the nominally "Red" states of the Midwest and South, there has been a large influx of Latinos and their respective voting bloc, a trend that is likely to only accelerate in the next couple of decades.
The embrace of extremism that this meme represents is going to hurt Republicans. As well it should.