last time, on encyclopedia dramatica …
for what it's worth, pedo-bear wasn't always alone. he had domo-kun tag along for the funneh and the lulz.
the pedobear image came from 2chan, about the same time as they were pushing domo-kun. while domo died an hero, pedo bear was by measures, less annoying than the snake/mushroom meme or the domo-kun meme of the day.
i barely remember this, but the story being pimped on ED at the time was, a user posted on /b/ about being arrested by the feds, and being /b/, started to talk it up and give people some great details about his home videos, and then how he'd scope out kids he wanted to film, etc. hanging out at daycare, dressing up in a bear suit for kids ??, etc.
knowing /b, it just sounds plausible from this point onwards, somewhat like reading a deadjournal report on a guy who nails his testicles to a school chair… you get the idea.
in an attempt to validate or back his shit up, people found this "Happy Bear" child molestation awareness costume → http://www.blankchildrens.org/body.cfm?id=291 .
soon after all the obligatory WTF and LOLz, people started to ask for pics of the costume, and lo, he came. likely the peeking kuma-chan pic, which was ultimately more funny than all previous attempts, and that just overtook the OP. just like all popular threads. and thus, a meme was born.
i.e. here's a google news link to "happy bear", the only damn story about it i could find, from the St. Petersburg Times, 1987, http://news.google.com/newspapers?id=9wUNAAAAIBAJ&sjid=UWEDAAAAIBAJ&pg=3266,3707533&dq=bear-suit+children