Nowadays, "Chaos Reigns" is used to shift a conversation, either concurring with or disapproving of what has been said. Its ambiguity makes it particularly appealing.
1. "Chaos Reigns" can be used to make the speaker aware of the fact that he/she has been creating an entire stage play for his/her thoughts, that must not be necessarily everyone else's real world experience. In a way, breaking the fourth wall.
2. Another usage of "Chaos Reigns" is, to accept a story as to be fucked up beyond all recognition.
Jack: I cannot stand those annoying quote graphics that seem to be on every girl's myspace that begin with "im the type of girl". I dont care! There are millions of people in this country, sorry honey but putting that graphic up along with thousands of other girls doesnt make you seem any more unique to me!
Jill: Chaos Reigns.
Jim: I went to the supermarket and I forgot to get the tooth brush I needed. Dang.
Bill: Chaos Reigns.