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1.
1) Any place where people hate being there, but are too scared, or guilted to move on, or organize, or to speak honestly about source of the problem. Where everyone pulls down someone who does something to get out and calls them deserter or quitter because they dont want to be lonely.

2) shithole, hotel california (you can check out any time you like, but you cant never leave), facebook, small town, abusive relationship, college, dilbert corpo, military

3) Originated from phenomenon of real life behavior of crabs caught in a fishing basket who could technically get out, but the ones near the edges are being pulled down by the ones at the bottom of the basket, hence noone leaves and everyone hates being there.
guy1: At first I thought of computers being cool and solving real world problems, but now I'm aware being stuck at this crab basket with 60h+ work week exhausting job, doing anything to look busy, since any solution to current work will result in extra work being placed on me.

guy2: Good thing I heard of small house movement and victory garden, they might be your way out of this shithole.
by Spaceship Earth Astronaut November 21, 2012