It is a coveted way of addressing the benefits that one derives out of having sex.
Currently it is used for more purposes which includes more desires than sex. Which means that if a person gets what they want then it is good for them.
He was very happy to work overtime today because he could go home half day on his anniversary. A little of what he wanted has done him good.
One should have sweets every now and then even they are fattening because a little of what you want can do you good.
Take a walk in the park, go out with friends and rejuvenate every now and then because it is true that a little of what you want does you good.
It is not impossible to take a day off from work for wanting to play video games. If it helps you calm down then a little of what you fancy does you plenty good.
There is no origin for this idiom
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definition
Common phrase that has a specific meaning.