When something is very annoying, stupid, or dumb. Can also mean something funny.
Bobby: Hey do you guys like my morph suit?
Marcus: Bobby, thats some gay ass shit.
Josh: A threesome with two guys isn't gay, but buttsex; now that's some gay ass shit.
Ryan: Hey Reid do you want to go to Chuck E. Cheese?
Reid: Chuck E. Cheese? That's some gay ass shit. But...sure.