Used to really mean genuinely nice, open, thoughtful and caring. Politically progressive, socially aware, doing for others, wanting to learn about other people and cultures.
I came to Minnesota 30 years ago, from New York City, where I grew up. New Yorkers aren't rude, we are just honest and efficient. I had had problems with passive aggressive people from other places who were "nice" to your face and back stabbing. So I was naturally leery of these Minnesota people. But no, they were really nice.
But things have been changing, even here. It is very sad to an aging peace/love hippie idealist. Still lots of cool folks though. Cool, like the weather.
When my new neighbor asked about my ethnic background, I thought she was prejudiced, but she was just being Minnesota nice and wanted to learn more about me.
I think a lot of Minnesota nice originated with the Scandanavian social customs and the need to pull together to survive the harsh winters during pioneer times.
Our late Senator Paul Wellstone was being Minnesota nice when he said "We all do better when we all do better."