By default this phrase is meant to be used in a nice way, as an excuse for unintentionally writing a whole sentence with Caps Lock on any chat. The person hits enter , without checking the written and notices that only after. Then he turns Caps Lock off and excuses for his ignorance.
Lately this excuse has been over-taken by retards and used right after the sentence, neglecting the ability to correct the sentence (delete and rewrite it). In many cases this 'excuse' is in caps also.
Marowit: SO YOU GOT A NEW CELL, I UNDERSTAND?
Marowit: sorry caps :/
xXx~|Sephiroxxoroorz|~xXx: HOW DO I USE IT I DONT UNDERSTAND, HALP ME PLX!!! SORRY CAPS!!!1
can also be said "sry caps", this is said after sending someone a message all in capitals by accident because you didnt know the caps lock was on. this happens frequently in instant messenger conversations.
bob123: SO DUDE I GOT A NEW SHIRT FOR WORK TODAY
bob123: sorry caps