Q:

Why is Libby calling her husband "Daddy"? 

In the 2013 TV show "Masters of Sex", Libby Masters calls her husband William "Daddy".  Apparently she uses this as a term of endearment. 
To be honest, I am a little creeped out by this.  Does she have serious "daddy issues", or was this really a common nickname for wives to call their husbands at the time? ( The show takes place in 1957.) 
Is this maybe something special the writers use to emphasize her wish to get a child? 

A:

Its referencing Marilyn Monroe quotes from the 1950's, around the same time the show is set:

More overtly erotic than Dorothy, and way cannier, Lorelei doesn’t give anything away.  She’s learned the hard way — being seduced and abandoned by a man back in Arkansas — that sex is a commodity: she’s got it, and men should pay for it, preferably in carats.  As she sings in “Little Rock,” “I’ve discovered since then that a girl in love / Usually gets a token of / A man’s appreciation in advance.”  She calls Esmond “Daddy,” which sounds faux-infantile but just the way a “professional lady” refers to her sexual sponsor: “I came to New York and I found out / The one you call your Daddy ain’t your pa.” 

http://entertainment.time.com/2012/05/13/megan-does-marilyn-gentlemen-prefer-blondes-is-her-smash/

A:

Daddy, as a term used during sexual intercourse, usually signifies that the person saying it is being submissive towards the person (usually a male) that they're saying it to.  It can be considered synonymous with other words such as master or Sir. 
Could also indicate that the male they're saying it to is their sugar daddy, a term for a male who provides their partner with financial support, usually to a high degree. 
Some people find it creepy, while others do not.