Too bad or not too bad?

Someone asked me how I was doing, and I said, “Not too bad.” “That’s good,” was the response.

Really? Good? I’m just not too bad. Obviously, “not too bad” translates to “somewhat good”. By the same token, does “not bad” translate to “good”? This sounds like newspeak to me.

Anywho, in saying “not too bad”, I meant that I was fine, so the response was entirely appropriate. I just thought it was kind of wierd.