I don't know when that kind of thing 'started' - I reckon people have been advertising clans, businesses etc. on their backs for far longer than we'd guess. Katy showed me some Japanese Firemen kimonos that were really really really old and they had a big symbol on the back. It makes sense to have something there; it's an even flatter, larger space than than your torso.
I think that, yeah, it's just a sign of rebellion. The hippies wore military jackets covered in patches against war, punks defaced and customised everything sacred, and most youth style tribes found something to stick a patch on.
As for leather; it's so easy to paint on, so it caught on pretty easily once motorbikes caught on. Normal acrylic is used and it stays bright and relatively, unusually, waterproof.
I am not all that well versed on when it started, but I'd guess it was fighter pilots from the wars. Then bikers (who were often goaded as a double rider looked like a German flight jacket) started painting them in gang signs etc. Then in turn it was picked up the the Hippies, the heavy metal scene and so on and so forth.



I've heard it said that writing on a banana with a ball-point pen is one of the most satisfying feelings known to man, but I'd add that painting on leather with a sponge and thick brush might be akin.
I think the 'style' of the above stuff is the real thing, it's scrawled, brushstrokes and generally made to look a bit punk. Reminds me of writing METALLICA and OFFSPRING logos on my schoolbag in tip-ex and the trend of shit home made bootleg logos:

/ramble