Blam! was the second code-name for Halo: Combat Evolved before the real title was finalized. It was used to replace the original codename, "Monkey Nuts", because project lead Jason Jones could not bring himself to tell his mother he was working on a game called "Monkey Nuts."
The term "Blam!" is now used to censor curse words on the Bungie.net forum, the Weekly Updates, and to censor inappropriate content names in Halo 3, Halo: Reach, and Halo 4. It is most likely a tribute to the word itself. Many non-Bungie users have caught the habit and use it abundantly.
The word was thought of because Bungie's Chicago office was located near a very busy street that had numerous near-collisions between cars. After hearing screeching tires outside with no audible crash, Robert McLees would yell "Blam!" so there was "a sense of completion."
An occasional glitch occurs in Halo 3 in which a player can name a map or game variant anything, regardless if it is inappropriate or not, and a notice of censorship will pop up telling you that its name must be "Blam!".