Little girl panties that have been worn too close to a dusty, cobwebbed crotch for too long. If someone has Krusty Undies they should think about getting some big girl panties and changing them more often.
This term is also often used to describe an adoptophile, specifically a barren woman who chooses to adopt from countries rich in child trafficking or someone who acts in a demeaning way toward all adoptees except her own child.
"WOW! She sure put on her Krusty Undies when she told that adoptee to be grateful they weren't aborted or tossed in a dumpster."