"Skookum" means "strong" or "powerful" in the Chinook jargon trading language of North American West Coast Native Americans/Indians. The language became a lingua franca for European settlers of different national origins as well.

"Skookum" Jim Mason (born of Tagish and Tlingit parents and given the Indian/First Nations name "Keish") was one of the discoverers of gold in the Yukon in 1896, and although the word skookum was often associated with evil spirits and spooky places, Skookum Jim's fame seemed to give English speakers only the positive connotations of the word. The word became generalized from meaning strong and powerful to meaning "high-quality." It is still used in that sense in Alaska, the Yukon, British Columbia, and the U.S. Pacific Northwest.

Sources:
Metcalf, Allan. How We Talk: American Regional English Today. Boston: Houghton Mifflin, 2000.
http://wordsmith.org/words/skookum.html
http://www.explorenorth.com/library/weekly/aa050799.htm
http://www.playbill.on.ca/skookumjim.htm
http://www.fs.fed.us/r6/umpqua/heritage/na_names.html
http://www.m-w.com/wftw/98jul/070398.htm
http://www.hiyu.net/about.html