This phrase is commonly used when stating how good or bad something is. It is used both sarcastically and non-literally (although almost literally because it indicates the true extremity of the matter/situation).
Use of the phrase when something is really good or really bad:
"This chocolate is as good as it gets," = the chocolate tastes really good (one wouldn't know if it is literally the best tasting chocolate in the world, but it is exceedingly good)
"This chocolate is a bad as it gets," = the chocolate tastes really bad (one wouldn't know if it is literally the worst tasting chocolate in the world, but it is exceedingly bad)
Use of the phrase sarcastically:
"This hotel's service is as good as it gets" = the hotel's service is really bad
"This hotel's service is as bad as it gets" = the hotel's service is really good