In 11.10 The Devil in the Details, Lucifer takes Sam to revisit some memories. At the memory of Stull Cememtry, Lucifer admits to being bemused by the term. Later when Dean and Castiel arrive to save Sam from The Cage, Cas again uses the insult.
The word has become widely used in fandom as a term of both abuse and affection. Ass is known as another word for a donkey. Castiel could have called Lucifer a donkey's butt.