This literally means "delete" but can also be used as a digital middle finger.
When combined with an action before (if needed, otherwise absent) and then a target after (required), this command can be used as a diss, only understood by command line geeks. (Typically Linux users.)
The most proper use of this phrase has an instructional nature, such as, "go rm -rf yourself" and can be directed at an individual "rm -rf noob" or a group of people "rm -rf /noobs."
From the UNIX command rm -rf /, used more loosely and can be artistically and freely expressed.
Lamer: Wow, you have a desktop cube!
Geek: Linux for the win.
Lamer: You have no life! Linux is for nerds. Macintosh is better than Windows and Linux combined, go on-line to the Apple web site and—
Geek: I'm a GEEK, not a NERD! Know the difference! Go rm -rf yourself!
Lamer: What does that even mean?
Geek: Go into your Terminal and find out.