Combination / play on words of the terms "as shit," as in "that was funny as shit," and "ass shit," as in "that was some funny ass shit"
Used as the ultimate adjective (when viewed in adjective form).
(something described asshit is much more than simply as shit)
Phil Mccrevis: Man did you see that To Catch a Predator that I was on?
Chris hansen: Yeah dude that was funny asshit.