i believe he chose the nickname himself. i always wondered if his storied sexual exploits as a young man had any bearing on the choice or if the irony was totally lost on him.
I believe the word "Johnson" entered into popular usage around 1984, when the film "Police Academy" came out. Cmdt. Lassard (George Gaynes) was complaining about how there never used to be female recruits... "There were Johnsons as far as the eye could see!"
I would imagine that Ervin was proud of both his exploits on the court and his "Magic Johnson" I doubt he was at all embarassed about it till hi got the AIDS