This refers to something which happens on the grandest scale possible on earth. This includes apocalypse, major war etc.
We cannot allow you to continue research on this weapon, it would cause a disaster of biblical proportions.
Something that happens on such a huge scale it could be biblical- ie in the bible. So when Jesus walked on water or performed one of other many miricles they are considered on bibical proportions, after all they're in the bible.
This event is of biblical proportions!