has two meaning
s: it can either mean "over, or out of, all of America
", or it can mean "entirely American
; free from un-American
In the first sense it is used to describe, for instance, national or continental championships -- the all-American chess champion is the foremost chess player in all of America.
In the second sense it is used to refer to a particular narrow-minded ideal of "Americanism", identified often with the nascent suburban nuclear family culture of moderately affluent WASPs in the USA during the 1950s. While all-Americanism in this sense has a certain "wholesome", innocent, and heroic sensibility to it, this is all too often revealed to be a veneer over xenophobia, paranoia, and outright hatred.
Many consider the shiny happy side of all-Americanism to be exemplified by the Boy Scouts of America or the artwork of Norman Rockwell. The scary side may perhaps be perfectly represented in HUAC, or perhaps the Ku Klux Klan. A rather hideous merger of the two may be found in "wholesome" institutions with paranoid agendas, such as Focus on the Family.
The term is also used ironically by critics of this ideal, as in referring to an "all-American serial killer".