These forms of contradictory retort (often heard from children)...
"it is [so] too"
"but it is"
"it is but"
...seem to have a "but" or "too" therein for emphasis. It might not have Germanic routes but it brought to mind aber in German for me, which in particulate form sometimes serves as a sort of surprise or emphasis (link provided for some clarity on this if interest arises - sorry it's not entirely committal emphasis, but I've heard as much from speakers). Of course "is too" also could be roughly compared with in truth and indeed in English; more emphasis.
I'm not sure how this form of 'argumentative' emphasis became a cliched juvenile retort - like anything and everything, perhaps through meme and repetition. Then, once denoted as a children's mode of speech it no doubt lost favour (and rhetorical credibility) among adults.