What you're seeing is a Prop 65 warning, which comes on just about everything and is posted in just about every business in the state of California. I don't think it's entirely accurate to call it a product of our litigious society, because it's not the result of a lawsuit; it's the law, passed in 1986 by ballot initiative. Lawsuits do exist as an enforcement mechanism for failure to comply with the law, however.
California has a ballot initiative system that allows anyone who can collect enough signatures to put a proposed law to a vote by the people, bypassing the legislature entirely. Most of the time, someone with expertise weighs in on the voter information pamphlet, and the poorly-written or downright stupid ballot initiatives fail. But neither the voters nor the legislators can always predict the exact outcome of what seems to be a well-drafted law.
The Safe Drinking Water and Toxic Enforcement Act of 1986, which appeared on the ballot and is now more commonly known as Proposition 65, was one such instance. It's a complex statute, but essentially it prohibits businesses from dumping toxic chemicals into drinking water sources, and requires them to warn consumers if they are exposing them to toxic chemicals. Sounds reasonable, right? And in fact, it has been pretty successful at getting businesses to reformulate their products to reduce the use of chemicals causing cancer and/or birth defects, which has benefited the health of not only Californians, but of everyone who does business with those who also wish to do business in California.
The warning part has been tricky, though. The idea was for businesses to either figure out a way to do without the specific toxic chemicals listed by the government, or at least inform consumers so they could make an educated choice about their own risk exposure (maybe pregnant women, for example, would choose to avoid certain products or businesses just like they avoid sushi, alcohol, and scooping the litter box until the baby's out.) But some businesses either choose to disregard the intent of the law and just post a generic warning, while others do their best to follow the spirit of the law by removing toxic chemicals but post the generic warning anyway just in case. Either way, you end up with something that is at first vaguely alarming but completely useless information to the consumer, and over time is ignored.
There was another ballot initiative in our state recently to require purveyors of food products to label any foods containing GMOs. Lots of people thought it was a good idea; after all, we don't know the full range of possible consequences that might result from monkeying around with DNA, and this would allow progress to continue while allowing individuals to choose how much of this brave new world they wanted to live in. Others pointed to the ubiquitous Prop 65 signs and said, "really? This again?"
So no, your dive bag is not going to give you cancer or a mutant baby. Also democracy is hard.