To mean that a person is all that and more. Usually it is an opinion and the only one who thinks it is that person. Other people usually don't believe the person is "all that and a bag of chips." The word chips can be replaced by almost any other word. Such as โall that and a bag of cookies.โ Or โall that and a bag of candy.โ Just to name a couple.
Some guy: Man, I'm all that and a bag of chips!
me: You may be all that and a bag of chips but I'm all that and a bag of skittles so taste my rainbow BITCH!