It is not a phrase that I am interested in teaching and it is not one that you should use. You can find examples and context by googling the phrase no doubt.
As Mister Micawber explained, this phrase is used when somebody makes you angry, irritated or embarrassed.
Ex.
A. You are such a wetblanket.
B. Oh, bite me
Keep in mind, there is another phrase beats me which is completely different with the above one which means you do not know the answer or you cannot figure out a situation.