That just reminds me of the bit in Gavin and Stacey, where Gavin and Smithy are on the phone to each other in cockney accents. The conversation went along the lines of:
Gavin: "You slag".
Smithy: "You slag"
Gavin: "No, you slaaaaag"
etc, etc.
Was quite amusing at the time and definitely an affectionate use of the word slag. Sometimes it's about how you say the word (difficult to appreciate on the internet), but my friends wouldn't be offended if I said to them, "Alright ya c**t?".