Early on, I'm good meant "I am without sin," but that is now seldom the meaning. In later centuries, good - followed by the preposition at - acquired a utilitarian sense, as in "I am good at whist, as well as at hand-held computer games." When followed by the preposition for (meaning "in place of" or "with the purpose of"), the adjective good became the hyphenated adjective and noun good-for-nothing. Recently, it acquired the phrasal meaning of "readiness," good to go.Why does this usage seem odd? We've been saying "I'm fine" this way for a long time, and "good" and "fine" are pretty damned similar. James Brown sang "I Feel Good," and the Beatles sang "I Feel Fine." They were talking about the same thing, though Brown seemed to be enjoying it a lot more.
The sense we examine today is a response to a question about capability or mood. "I'm good" means "I can handle it" or "It doesn't trouble me"; its implied ensuing preposition is with, as in "It's all right with me."
I think "fine" is just a bit old-fashioned. As the stock answer to the question "How are you?" it's taken on a stodgy, phony attitude. "Good" seems more honest and friendly.
But have you noticed that people have taken to saying "It's all good"? Is there some character on a TV show I don't watch who's popularized that? The other day, I was being a little careless moving my shopping cart forward in line at the store, and it slightly touched the woman in front of me. I said "I'm sorry," and she said "It's all good." Man, what an optimist! I guess just the great joy of being alive is so incredibly cool that when someone bumps into you, she recognizes it as all part of the great gift of sensory awareness. It's all good.