Same as down. Used primarily by Unix hackers. Humorous: also implies a condition thought to be relatively easy to reverse. Probably derived from the Canadian slang ‘hoser’ popularized by the Bob and Doug Mackenzie skits on SCTV, but this usage predated SCTV by years in hackerdom (it was certainly already live at CMU in the 1970s). See hose. It is also widely used of people in the mainstream sense of ‘in an extremely unfortunate situation’.
Once upon a time, a Cray that had been experiencing periodic difficulties crashed, and it was announced to have been hosed. It was discovered that the crash was due to the disconnection of some coolant hoses. The problem was corrected, and users were then assured that everything was OK because the system had been rehosed. See also dehose.