Nicknames, as well as call signs are typically given, not chosen. They can be based on infinite criteria, but I'll guess mostly based on something stupid done with lots of beer.
Well anyway, in my case, "Demon" was the name my (so called) friends gave me making fun of my given name and also poking fun at my sometimes "passionate" mood towards stupid things and/or people. As in... I would lose my cool when people did stupid stuff towards me, and I had a hard time "understanding their feelings," you know, the feelings of those idiots... OK... you may get where I am going.
Anyway, so when I invented the Interwebs like, 100 years ago, I decided to embrace that persona... so I became "Demon."
Demon was the name I have became known in the Star Wars space flight sim series Mod communities, specifically the ones dealing with the X-Wing (XW), TIE-Fightter (TF), X-Wing vs. TIE-Fighter (XvT) and X-Wing Alliance (XWA) space flying sims. I created a few applications for those sims, most notoriously BinHex Edit, which allowed scripted changes to binary files, including executables. Recently I found out that application is still used today. Well cheers...
I was always a huge WW2 aviation admirer, helped by my father's similar passion. When I heard of the original IL-2 project I got involved as soon as I could.
By that time the "Interwebs/Internets" were full of people, most of whom I did not like... because I don't like most people, and other people dared to take the nickname "Demon". Well, I decided I would show them...
I became "UberDemon."
Yeah... pretty lame.