<jargon> A somewhat humorous variant of "down", used primarily by Unix hackers. "Hosed" implies a condition thought to be relatively easy to reverse. It is also widely used of people in the mainstream sense of "in an extremely unfortunate situation". The term was popularised by fighter pilots refering to being hosed by machine gun fire (date?). Usage in hackerdom dates back to CMU in the 1970s or earlier.
The Jargon File version 4.1.4 1999-06-17 says that it was probably derived from the Canadian slang "hoser" (meaning "a man, esp. one who works at a job that uses physical rather than mental skills and whose habits are slightly offensive but amusing").
One correspondant speculates about an allusion to a hose-like body part.
Once upon a time, a Cray that had been experiencing periodic difficulties crashed, and it was announced to have been hosed. It was discovered that the crash was due to the disconnection of some coolant hoses. The problem was corrected, and users were then assured that everything was OK because the system had been rehosed. See also dehose.
See also: hose.