The term derives from this "duster" getting completely obliterated in anything he/she does and collects dust.
Example: A person who gets left in the dust.
Someone can be considered a "dust" if they failed an exam or if your just a "dust" and anything; can be sports, school, video games, etc..
Getting dusted in Hockey
"Wipe that dust off your shoulders!"
"Wow, what a dust!"
"Your such a duster"
Frankie: Hold on, i'm about to get dusted.
Frankie: Waw Waw Waw Waw...Yooooooooo
Jimmy: Dude, you are dusted!