It's a combo-word. Loser/user. I'm guessing.

/loo'zr/ n. [common] A user; esp. one who is also a loser. (luser and loser are pronounced identically.) This word was coined around 1975 at MIT. Under ITS, when you first walked up to a terminal at MIT and typed Control-Z to get the computer's attention, it printed out some status information, including how many people were already using the computer; it might print "14 users", for example. Someone thought it would be a great joke to patch the system to print "14 losers" instead. There ensued a great controversy, as some of the users didn't particularly want to be called losers to their faces every time they used the computer. For a while several hackers struggled covertly, each changing the message behind the back of the others; any time you logged into the computer it was even money whether it would say "users" or "losers". Finally, someone tried the compromise "lusers", and it stuck. Later one of the ITS machines supported `luser' as a request-for-help command. ITS died the death in mid-1990, except as a museum piece; the usage lives on, however, and the term `luser' is often seen in program comments and on Usenet. http://dictionary.reference.com/browse/luser

Per http://en.wikipedia.org/wiki/Luser : "In Internet slang, a luser (sometimes expanded to local user; also luzer or luzzer) is a painfully annoying, stupid, or irritating computer user. It is a portmanteau of 'loser' and 'user' and is usually pronounced as 'loser'."

Old computer term. When someone logs onto a computer, they are a user. If they constantly need support for simple tasks that they've been taught, we would call the "L"-users there for luser. I've been saying it since the 80's, but I am guessing the origin is older.

Luser From Wikipedia, the free encyclopedia One example of the usage of "luser".In Internet slang, a luser (sometimes expanded to local user; also luzer or luzzer) is a painfully annoying, stupid, or irritating computer user.[1] It is a portmanteau of "loser" and "user" and is usually pronounced as "loser".[2] The word luser is often synonymous with lamer. In hackish, the word luser takes on a broader meaning, referring to any normal user (in other words not a guru), especially one who is also a loser. This term can also signify the user as a layman, as opposed to power user or administrator; for example, end luser. This term is very popular with technical support staff who have to deal with lusers as part of their job, often metaphorically employing a LART (Luser Attitude Readjustment Tool, or "clue-by-four").