How authentic is the supplication: "O Allah, take from our souls, and our bodies, and our blood until You are pleased," and does it have any basis in Islamic law?

A supplication like this was reported from some of the Salaf, such as Talhah ibn Ubaydullah, Ali, and Amr ibn al-Aas - may Allah be pleased with them - when wishing to atone for a mistake or shortcoming, preferring the punishment of this world over that of the Hereafter. The best and safest approach is for a Muslim to ask his Lord for martyrdom in His cause and for the highest ranks in Paradise, as the Prophet - peace and blessings be upon him - and his companions used to do.