Meaning "shit is weak", this phrase is appropriate when a person, object, or event is weak, not as cool as originally thought, or otherwise lacking.
Examples of when it is appropriate to use this phrase:
Your friend posts a video of a rice rocket
on Facebook, exclaiming how cool it is, but it isn't. You comment "Shit's weak."
You buy some espresso from Starbucks, only to find that it isn't as delicious as everyone says. You mumble, "Shit's weak."
You go to a party only to find that most of the attendees are not of the opposite sex (or not of the same sex, whatever floats your boat). "Shit's weak."