1. Don’t invite Jerry to come along. He’s a wet blanket, and he just ruins everyone’s good time. 98
2. Why don’t you relax and have a little fun? Don’t be such a wet blanket.

This expression appears to come from the practice of using a wet blanket to put out campfires. If one thinks of the fire as being vibrant and exciting, then putting a wet blanket over it would extinguish or diminish that excitement.