U.S. Navy teletype machines produced chad from paper tape since before the Korean War. Chad was somewhat of a nuisance because it always got into sailors’ hair, clothes, and shoes. On occasion, though, they would throw chad parties for departing sailors in which they would cover their shipmates in chad.
What seems to be jargon may in fact be considered mainstream because it’s been reported that the word chad was used (1993) in the directions for a card-based voting machine in California.