My understanding is that hack means to chop roughly, and later came to mean any job done shoddily. A hack job may be done badly, but works. A hack in programming is similar - an inelegant or inefficient solution, but one that works. There are still find many programmers who refer to themselves as hackers because it still refers to the spirit of tinkering, exploration and do-it-yourself. This is the type of hacking a hackathon refers to.

Hackers later became associated with the subset of tinkerers who explore via breaking into systems. There are still folks fighting the good fight (for an example, pick up a copy of 2600 Magazine, subtitle: The Hacker Quarterly) to keep "hacker" to refer to a tinkerer and "cracker" to refer to people who gain unauthorized access to systems.