This phrase was popularized by a television
commercial campaign for Palmolive dish washing detergent. Madge, a
manicurist, would comment on the dry, rough appearance of her client's
skin as she worked on one hand while the other
soaked in a bowl of light green
liquid. The client would ask her advice; Madge would recommend
Palmolive; the client would act surprised (after all, how could a
dish washing detergent affect one's skin?
Preposterous.). Then Madge would inform the client about the liquid in the bowl: "You're soaking in it," she'd say, in a very matter-of-fact tone. The shocked client would immediately remove her hand from the bowl, and Madge would guide it back down, assuring her that everything was fine: "Palmolive softens hands as you do dishes."
The ad campaign was created by the Ted Bates Ad Agency in
1966 and ran into the early '90s.
Modern usage of the phrase occurs in situations similar to the
well-intentioned ruse pulled off by Madge: someone is not
aware of a situation or state, comments about it, and is told,
"You're soaking in it." Example: a newbie might show up in the
Chatterbox and ask, "hey, where's this chatterbox thing I've
heard about?" Answer: "you're soaking in it."
Source:
http://www.tvacres.com/admascots_madge.htm