The word ладный means good, balanced, just, harmonious.
By extension, ладно means "okay, well". As a standalone word, it means agreement after period of hesitation.
Yet by extension, ладно тебе means "enough of that", as in "this is well enough for you, so you should stop doing that":
― Ладно тебе жалеть-то, ― махнул он рукой. [С. А. Есенин. Яр (1915)]
The word хорош "good" (always in singular masculine short form) can be used for the same purpose:
― Хорош орать, старый, ― сказал Егор. [Алексей Рыбин. Последняя игра (2000)]
The particle да forms imperative in persons other than second, similar to English "let", like in да будет свет "let there be light".
It can be used to emphasize the fact something will or should be done, despite the previous argument about that.
Да дай ты ему конфету, пусть заткнётся // Give him the candy already, that would shut him up.
Да схожу я в магазин, только доиграю // (Okay, okay, I hear you,) I would go to the store, just let me finish the game.
So да ладно means "this is well enough for you (to be telling this so stop doing this already)", condensed into a simple "well" preceded with an emphasizing particle.
If you squint hard enough you can see that this is an expression of fake disbelief, similar to "no shit" or "no kidding" or such like.