I've always used swag to mean 'stuff' or 'gear', based on the Australian "swag-man" who carried all his belongings in a swag (prototypical backpack). Here the word also sometimes specifically refers to a light sleeping mattress that formed part of a swaggies essential kit.

So for me, the #yolo application of swag to mean "has his shit together man" derived as a metaphorical application of the literal "has his gear together". And the OP's use to refer to swag as gear a band sells makes sense in the original definition.

I'm pretty sure it's commonly known nowadays to be merchandise related to a label, yeah: http://swag.atlassian.com/