An opinion about the size of a woman's breasts. When someone uses this phrase with conviction, it suggests a certain amount of hands-on experience was involved. Since it goes against the built in super stimulus response human males generally have towards breasts, it also suggests a transcendence of instinct that can be considered part of that which separates humans from other forms of life. It also has the advantage of scaling with the size of the speaker; taller people tend to have propotionally larger hands.
It is often used to bolster the self-esteem of girls who feel that their cup size is inadequate. Be wary of this in disingenuous useage: it is a good sign that all someone wants to do is get into her pants. Men sometimes think it makes them seem enlightened to buck the trend of big-breast obsession, whereas said this way it still reduces a woman to her cup-size.
Physically, it is not an unreasonable assertion. It suggests a good balance between tactile sensation for the holder and good percentage coverage of stimulation for the posessor.
For those whose fixation is more oral than tactile, the expression would be "anything more than a mouthful is a waste."
It should also be noted that both forms of this expression can be used to refer to the size of a man's penis, though this useage seems less common. The use of the alternate forms "anything more than a vaginaful is a waste," and "anything more than a bumful is a waste," are generally dicouraged, both for their vulgarity and the lack of an easily-applied standard.
May 2001: borrowed an idea from this prior art I just found.