My Mom would say this all the time when I was young (I am 31 now).
I second the notion that it is slang for "Oh S*#T", but (in my house) it was used in a "laid back" context.
(after stuffing you face at Thanksgiving dinner you unzip your pants and slide down on the couch)
what happens when you go for more than a day only eating only candybars. Trust me it's not cool.
Man so I didn't want to go to the grocery store, but all we had in the fridge was fun size 100 grands.... You shoulda seen the poopydust the next day.
I first heard this word in 1991. My friend Katie said it in seventh grade. I believe it is a euphemism for the s word (you know, 'poop') - I don't know if I'm allowed to print it here. Anyway, I think it's cute and have only heard it once since - from a co-worker named Christina who thought she made it up.
Upon realizing you don't have enough change for pop/upon realizing you set off your car alarm... "Oh poopydust!" Yeah, it's usually said alone. Giggling usually ensues.