The word "appropriate" means correct or proper and since the little prefix "in" turns its meaning around, something inappropriate is considered not proper or suitable.
Nowadays, it seems, anything goes. Yet good manners and standards prevail, and some things are simply inappropriate — such as taking a toddler to a violent movie, or making jokes at someone else's expense. You wouldn't show your future father-in-law naked pictures of his daughter or wear a bathing suit to a state dinner. Those actions are simply inappropriate.