An all around insult. It can be used in any situation where a person is or has done something particularly stupid. However it is definitely not something to take offensively, because it is not the kind of word where you could take offense, such as "idiot" or "retard".
Taylor: Yo did u see what Richard did?
Gwee: No, what did he do?
Taylor: He accidentally took off his eyebrow while shaving this morning.