This interests me as well. My father also used the phrase on occasion. I also use it infrequently and I was wondering where it originated. My paternal grandmother's family was from Ohio and Indiana, so the Hoosier thing makes sense to me. We live in Texas and I've never heard anyone else use the phrase except my Dad. Maybe someone will have more information for us.
The OED has:
3. trans. and intr. colloq. gen. To pilfer, purloin; to acquire (property) inappropriately.
1793 M. Pilkington Rosina II. xii. 134, I tells him he has robbed the dead, for he has cabbaged it [sc. a garden] out of one corner of the church-yard.
1795 Parl. Reg. XLII. 446 A new office was to be cabbaged out of the Duke of Portland's, and an obvious diminution of his credit and authority was to be proclaimed.
1836 G. Penny Trad. of Perth 86 One of them cabbaged a bottle of wine from the waiters.
1862 H. Marryat One Year in Sweden II. 387 Steelyards..sent by Gustaf Wasa as checks upon country dealers, who cabbaged, giving short weight.
1946 Life 5 Aug. 45/2, I have cabbaged all my copy paper free at the Sun office since 1906.
1956 H. L. Mencken Minority Rep. 141 The quacks got enormous power out of the process, and in all probability cabbaged most of their victims' property.
1995 W. Carroll Two Wheels to Panama 131/1, I helped tie the bike to a stanchion then cabbaged a..doughnut and bottle of warm cola.
#3 is the last definition of the second verb occurence.
Love the show! I always seem to be driving when it's on so can't call in.
Anyway, to the topic.
Couldn't help noticing the similarity to the word "cadge," meaning "to persuade someone to give you (something) for free" (Merriam Webster online dictionary). Sense is more to wheedle than to steal, but I've heard "cadge" used in that latter sense too.
First sense: He cadged a cigarette off me.
Second sense: He cadged a couple of cigars while the boss was out of the office.
Perhaps "cabbage" is a mishearing or corruption of "cadge."
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