This is typical of the way people really speak when they are not thinking too hard about language--for example, when they are under stress. It is not grammatical. Nevertheless, as a native speaker I find it easy to understand. I here this as a flowing combination of two different sentences: "Is that all you can say?" "All you can say is 'sorry?'" Somebody has done something terrible. They have said "Sorry." All they have said is "Sorry." The speaker is upset, because the single word "Sorry" isn't enough. "Sorry," all by itself, is only appropriate when apologizing for a very small thing. "Excuse me, you're standing in my way." "Sorry." (Steps aside). "Thanks." "Erase everything on the hard drive. Are you sure? [Yes] [No]" Person A clicks "Yes." Person B "You just erased all my work! Six years of work is gone!" Person A: "Sorry." Person B: "That's all you can say? 'Sorry?' All you can say is 'Sorry?'" OR... under stress and not thinking carefully about language, Person B might "blurt" out: "That's all you can say is 'Sorry?'"

It's incorrect English but sometimes phrases like this are used over and over to the point where they become a recognized phrase in our language. Most likely, we've all heard it and know what is being implied. It's better to say, "all you can say is sorry?" It reminds me of the phrase, "I could care less!" where the correct form is actually, "I couldn't care less". But saying it incorrectly is quite common. My guess on why we say "I could care less!" is that it flows better and is easier to say.

Hmm, you'd probably more often hear it said like, "that's all you can say? 'Sorry?' " or "all you can say is 'sorry'?" But in the example you noted, I guess you can think of it as a shortened way of saying "that's all you can say? the only thing you're saying is 'sorry'?" essentially you're asking them if "sorry" is the only thing they can say.

I have learned English and Spanish all my life but I'm still learning but I could help you and you help me speak Mandarin yes, please :)

Thank you for your help!