I always thought shed came from them being the sort of rust bucket normally found abandoned in a shed. Barely running, owned by someone who can barely fix or fuel it. So it would be somewhere to sit parked - and listen to the crappy stereo at max distortion - with bits falling or rusting off it in time to the bass. Least that's how we used it oop north in the 80s. The car equivalent of a rat bike. Both sewn together corpses, and animal corpses hiding in dark corners...
Pistonhead's Shed of the Week[1] is far too upmarket to be a proper shed - they all work. :)