The OED defines choice as an adjective as follows: Worthy of being chosen, select, exquisite, of picked quality, of special excellence. This seems to fit your usage. This is a very old word; they have citations for this sense going back to 1370:
1340–70 Alex. & Dind. 727 Him a chalis ful chois wiþ good chere bringen.
It may have fallen out of common usage before being revived as slang (perhaps acquiring new connotations in the process). But it is still around in standard English. For example, here in the U.S., the federal Department of Agriculture assigns quality grades to meat which include Select, Choice, and Prime.
Often, when obscure or obsolete words are revived as slang, they acquire meanings that are very different (radical, cool) or indeed opposite (sick, killer) to their literal meanings. But sometimes the literal meaning is intended (though sometimes exaggerated). The first example I thought of is heinous.