"It's Made For Kids" is an excuse used to dismiss criticism towards video games made for younger players.
There is also an article on this topic on the Terrible TV Shows Wiki.
It is well known that kids are easier to entertain by simple things that adults may find boring, likewise they don't have fully developed motor skills and reflexes that would be required to play highly complicated adult games. Because of that video games targeted at younger audiences tend to be easier and simpler than games targeted at older players, but that doesn't mean that games aimed at kids should be too simplistic and basic.
Often when games meant for younger audiences are criticized for poor quality, short length, excessive hand-holding, underestimating player intelligence, and/or being overly simplistic, some might use "It's made for kids" as an excuse for doing so. While it is understandable that kids may have a hard time with complex games that adults may like, saying that "it's for kids" shouldn't be an excuse for making low-quality games and excessively easy games that grown ups will find boring. This excuse also treats kids like unintelligent beings with little to no taste.
A good game meant for kids should be simple enough that kids can pick up play it with little trouble, yet have enough content and substance that older players will find interesting and fun to play so that when grown up gamers go back and revisit the games they've played in their childhood and they can still have a good time.
On the other hand, there are some older people who dismiss games targeted at young audiences as "Kiddie games" and often say things like "those games are for kids, they're too easy and boring". Just because a game has a younger target audience that doesn't mean that older people aren't allowed to play them or won't find challenge and substance in them. If the game is well made, anyone can enjoy them.
Even if a game is aimed at kids the adults may also be interested in it (for example, the ESRB rating E stands for Everyone, not just kids). There are many games aimed at younger audiences that can also be enjoyed by grown ups, for example, the Super Mario Bros., Ratchet & Clank, and Pokémon just to name few; those games are accessible and easy to understand, but also respect player intelligence and don't pander to kids. There is absolutely no excuse for making a bad quality game just because of who it's targeted towards.