i never bothered finding out how this genre of jokes came about, but i love innuendo and wordplay enough to (some may say, excessively :D) indulge in it anyway.
"that's what she said" jokes are simple enough: reply to any innocent-sounding statement, which, taken out of context, could be interpreted as innuendo (wordplay, slang and all other such things are allowed while reinterpreting), with "that's what she said" or "that's what he said". or, if you're on twitter, #TWSS or #TWHS for brevity.
so far, so good.
the confusion arises when you need to decide between "he" and "she". and that's where i need to make a point.
the gender of the person who made the original (innocent) statement doesn't matter at all. nor does the gender of the joker. the gender *has* to be picked so that the hypothetical innuendo is as funny as possible, taking into account pop culture, slang, gender biases, and whatever else may work to make one side funnier than the other.
@TheSoothsayer_ said to @hinnaz: "they look so awesome!" (both people involved are women)yes, that's a he. why?
me: that's what he said.
simple. ever heard a girl telling a guy (assuming both people involved are straight, to avoid confusion) that "they look so awesome!" (they, referring to *ahem* body parts here)?
guys say that to girls all the time though.
and so, it's a *he*.
on the other hand:
@Sakshikumar: "Phew. All good now. Couldn't breathe there for a moment."no points for guessing why that's a she. (fine, sakshi is a she too, but that's irrelevant)
me: that's what she said.
okay, enough lecturing for today.
TL;DR: picture a guy saying x in a sexual situation. picture a girl saying x in a sexual situation. which one is funnier? bingo!