It is used to denote the point in a movie or movie series at which the characters or plot veer into a ridiculous, out-of-the-ordinary storyline. Films that have "nuked the fridge" are typically deemed to have passed their peak, since they have undergone too many changes to retain their initial appeal, and after this point critical fans often sense a noticeable decline in their quality.
It is considered as the movie correspective of what Jumping the shark means for television.
The term is an allusion to a scene in the 2008 film Indiana Jones and the Kingdom of the Crystal Skull of the Indiana Jones series, when the title character Indiana Jones is literally hit by a Atomic Bomb blast while hiding inside a refrigerator in a desperate attempt to escape a nuclear test facility. The fridge is hurled several miles through the sky, and tumbles hard to the ground. The scene was considered so preposterous that many believed it to be an attempt at outdoing the over-the-top action of the classic introduction sequence of the series.
Nuke-the-fridge moments may be scenes like the one described above that finally convince viewers that the film has fundamentally and permanently strayed from its original premise. In those cases they are viewed as a desperate and futile attempt to keep a series fresh.
The phrase refers to the opening scene in Indiana Jones and the Kingdom of the Crystal Skull, first worldwide released on May 22 2008. The infamous scene was seen by many as betraying the normal half-serious tone of the series, by introducing an element of cartoonish factuality and typical excess.
The first public use of the phrase as a direct metaphor is reported to have been on May 24, 2008, on IMDB boards by user beachedblonde.
The phrase has been used more recently outside the realm of popular culture, representing anything that has reached its peak and has turned mediocre. If one thinks a stock or a sports team or a subcultural phenomenon has reached its peak, for example, one can say that it has "nuked the fridge."
Star Wars - Jar-Jar Binks says "Ex-squeeze me"
Matrix - When 100 Agent Smiths attack a CGI Neo spinning around on a pole
Spider-Man - When Peter Parker turns Emo and starts dancing around a bar
Batman - When Batman has to fend off a bunch of glowing neon-painted hooligans to rescue Robin after he stole the Batmobile