The term "nerfing" comes from the online gaming world of Ultima Online.
At one point in the game, the developers reduced the power of swords in melee combat.
This resulted in players complaining that it was like they were hitting each other with nerf bats, not swords.
From then on, if ever something gets made less worth while than it had been originally, it is considered 'nerfed'
"Oh man, they reduced the dmg on the berserker class and now it's totally nerfed!"
"Damn, the Devs nerfed those axe's real good!"
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