The Rice University Neologisms Database

Describes something that is not appropriate or acceptable. Used among high school and college girls, generally as a response to hearing about a breach of social etiquette by a peer. It is often spoken on its own, not as part of a sentence, though it is understood as referencing what was just said. It is probalby clipped from inappropriate, but the addition of the –o seems to have no function other than allowing a repetition of the last sound.