The likely origin of this expression has to do with geology. Western cultures typically associate being "high" or "up" with affluence and success (e.g., things are looking up, profits are rising), and "low" and "down" with poverty and unhappiness (e.g., I'm feeling down today, I can't sink any lower). Now, imagine that you're as far down as you can get. You're lying on the ground. But if things get even worse, you will go under the ground. Now you're in the dirt. Now, in addition to everything being as bad as it can be, I run off with your sheep and you start guzzling woolite for solace. Now you seriously can't get any lower; you're beneath the dirt and on the bedrock. Even if you took a shovel and tried to dig yourself deeper in, you couldn't get past that. You have hit the rock bottom.