So, when you say "psyche!", it means that what you just said was just in your imagination, not in reality. My guess is that the word, as used today, originated from sombody calling peoples fantasies, psyche, and it slowly moved towards anything not really there.

She was also Cupid's lover, who told her not to try and see him. So it could also mean, love that can not be seen or used to refer to someone teasing someone with love but never giving it, further clarifying the modern meaning.