We present a simple model that explains the origin of warm diffuse gas seen primarily as highly ionized absorption line systems in the spectra of background sources. We predict the observed column densities of several highly ionized transitions such as OVI, OVIII, NeVIII, NV, and MgX; and present a unified comparison of the model predictions with absorption lines seen in the Milky Way disk, Milky Way halo,starburst galaxies, the circumgalactic medium and the intergalactic medium at low and high redshifts. We show that diffuse gas seen in such diverse environments can be simultaneously explained by a simple model of radiatively cooling gas. We show that most of such absorption line systems are consistent with being collisionally ionized, and estimate the maximum likelihood temperature of the gas in each observation. This model satisfactorily explains why OVI is regularly observed around star-forming low-z L* galaxies, and why NV is rarely seen around the same galaxies. We further present some consequences of this model in quantifying the dynamics of the cooling gas around galaxies and predict the shock velocities associated with such flows. A unique strength of this model is that while it has only one free (but physically well-constrained) parameter, it nevertheless successfully reproduces the available data on O VI absorbers in the interstellar, circumgalactic, intra-group, and intergalactic media, as well as the available data on other absorption-line from highly ionized species.