This used surely to be the sign of a marksman. He would shoot out the lights by shooting the wicks of the candles in a chandelier - and the trick was to do it without touching the wax.
Hence it has come to mean extreme accuracy - even in children ball games.
Kevin Durant in Turkey 2010basketballworld championship really did shoot the lights out!
When you are hosting a party, and you finally want everyone to leave. You hint and even ask them to do so but they never do. You walk over to the circuit breaker box and start flippin' them switches!!!