Beyond the phrase 'being backward'. It means lacking any insight, intelligence, correct action, respect to human rights, cultural sophistication, and most of all common sense.
Having a parked car on the lawn while drunk on a couch also on the lawn ass backwards.
Being racist is ass backwards.
In the computer game Civilization having your nation in the dark ages when every other group is building spacecraft is being completely ass backwards.
Putting something together wrong is ass backwards.