This phrase is an odd variation from the regularly used phrase "that sucks". There are
two main definitions of this:
1) in literal terms, putting your
mouth to an anus and quickly inhaling, causing a stream of air to be pulled into your
mouth from the anus.
2) in slang terms, to be bad. This is how the phrase is most commonly used, and tends to be more intense than the usual "that sucks." "That sucks ass" is like adding a "really" to it.