Here's an excerpt from an online article about the term "beatnik". That article begins with the statement that the term "The Beat Generation" was coined by Jack Kerouac in a 1948 conversation with novelist John Clellon Holmes, who went on to write a New York Times article about it, 'This Is The Beat Generation'.


"...In fact the original word meant nothing more than 'bad' or 'ruined' or 'spent.' We all use the word this way. When somebody is trying to get one last hit out of a bowl of weed and there's nothing but ashes left, you say 'Don't bother, it's beat.' Or when you're tired: 'I'm beat.' There's beaten-down, beaten-up and beaten-out. The connotation is defeat, resignation, disappointment.

That kind of beatness is what Kerouac was describing in himself and his friends, bright young Americans who'd come of age during the Second World War but couldn't fit in as clean-cut soldiers or complacent young businessmen. They were 'beat' because they didn't believe in straight jobs and had to struggle to survive, living in dirty apartments, selling drugs or committing crimes for food money, hitchhiking across the country because they couldn't stay still without getting bored. The phrase 'Beat Generation' was meant to echo Ernest Hemingway's description of his own crowd (which came of age during the First World War) as the 'Lost Generation,' a phrase Hemingway picked up from an off-hand remark made by Gertrude Stein.

But the term 'beat' has a second meaning: 'beatific' or sacred and holy. Kerouac, a devout Catholic, explained many times that by describing his generation as beat he was trying to capture the secret holiness of the downtrodden. In fact, this is probably the most central theme in Kerouac's work (think of the saintly hobos and lonely truck drivers of 'On The Road' and 'The Dharma Bums')".

Source: http://www.litkicks.com/Topics/BeatEtymology.html