A professional wrestling squash is a match in which one one wrestler utterly destroys the other, getting 99% percent of  the offense and not selling anything.  Ergo, squashing his opponent like a bug.

Usually only jobbers will get squashed--it is their raison d'etre.  It can happen to normal wrestlers under certain  circumstances, though, like a wrestler being punished for something they did backstage or for poor performance in previous matchces.  It could also be done to build someone up someone as a superman by having them run roughshod over everyone--that's exactly WCW tried to accomplish with Goldberg in 1998 by having him squash just about everyone he wrestled.  It worked, for the most part.

When a wrestler gets squashed, overall, it's a pretty good sign that the promotion doesn't have much faith in them.