I don't think it's so much about the circumstances as about the inexperience of the doer, or his (it's usually "his") not being big enough for the job. You didn't think he'd do as well as he did, and you're complimenting him for having had the guts to step up and try. The image I get is of a boy getting ready to fight for something, advancing and curling his hand into a fist.

It's a very British concept, because you're expressing admiration for a brave loser.