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This has gotten lost in all the false meanings. A chip on his shoulder comes from the days when there was a formal declaration for a fight, punch-up etc. When a person disagreed strongly with someone over a personal belief, they would place a chip of wood on their shoulder and dare the other to knock it off. Once the other person did this signaled the beginning of the fight and thus punches were thrown. Examples of this can be seen in old British movies circa 1930-1950's. We use this idiom to say that someone has a deeply held feeling or conviction about something (whether it annoys them or that they won't listen to any other opinion about it) and thus if you disagree then they will vehemently challenge you.
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