“Staycation” is a portmanteau that was probably coined by someone in public relations, since it has that “trying to repackage something bad as a really cool new thing” feel to it, in that Toxic Sludge is Good for You way.
My friend Merlin Mann feels pretty much the same way, as he says:
“Staycation” is such a clever coinage. I also like “home funclosure,” “personal awesomeruptcy,” and “stunning national opportunitypression.”