This is a famous line from the famous movie The Big Lebowski that has also become famous as a quote on the internet and in memes, often in an abbreviated form. I had learned the phrase, and knew it was from the movie, but only recently saw the movie and learned its context.
In the movie, Jeff Bridges character, Jeff "The Dude" Lebowski is approached by a rival in a bowling tournament, who asserts his future victory over The Dude in violent and sexual terms. The man doing this is also a known sex offender. The Dude, while leaning back with his head in his arms, comes up with this as a retort.
When I heard the line in its pop cultural context, I thought it was making fun of hippies for being wishy-washy and believing everything was subjective. And indeed, that is one way to look at it in the movie: The Dude is just too lazy or stoned to get into conflict. But another way to look at it is that The Dude is refusing to take the bait and become upset. His non-confrontational attitude could be a matter of principle. This is mirrored throughout the movie, where its not clear whether The Dude's stress-free lifestyle is a matter of wisdom or foolishness.
Like many quotes in pop culture, it is funny, but is more interesting in its original context.
Brevity Quest 2021