The phrase "all that" is a shortened version of the catchphrase "all that and a bag of chips", which was briefly popular in the 1990s. The intent of "all that and a bag of chips" was to mean something that meets and exceeds expectations, like a lunch that includes something extra at no cost. It was shorted to "all that" and became a common part of urban/African-American slang for a while, before it was embraced by mainstream commercial pop culture trying to seem timely and young.
In modern usage, "all that" still means exceptional. Saying something wasn't "all that", therefore, is a way of saying unexceptional, or not impressive. It is no longer a commonly used phrase unless someone is deliberately (or ironically) trying to reference 90's culture, so I would not expect to see this again.