While the exact meaning is simply a non-functioning flaccid penis, the term has vast connotations and application.
Calling a man a limberdick says he is unable to perform even the most basic and primal primal functions.

Limberdick maybe combined endlessly with other vulgarities to achieve remarkable curses, such as the now famous "limberdick cocksuckers". An epithet that calls to mind a man unable to get anything right; who then sucks cock as a means of getting things done for himself, in other words a politician.
All in all Limberdick is a delightful word. A flexible curse certain to find its way into use in all forms of public speech.

See also the less effective but more commonly used limp dick.

A casual invitation / threat used by an individual that is not afraid of fucking someone up.

n. An impotent person.

a guy who is always hard, but never gets any action!