Literally, “lame” means “injured”. Example: the horse is limping because it has a lame leg. In the context of your sentence, however, “lame” means “very unimpressive”. It is not necessarily rude, but it is always negative. Be careful about using it, because it comes across as highly critical. The word is used mostly commonly to modify “excuse” — a “lame excuse” is a really bad excuse. Example: “Jim said he would come to my party but then didn’t show up. When I asked him why he didn’t come, he made up some lame excuse about having to work late.” It is also used to say that some activity is boring or worthless. Example: A: Let’s go bowling. B. Bowling is lame. Let’s go to the beach instead.

It is rude in the sense that it's offensive towards people with disabilities, and someone might ask you to not use it when you speak with them https://en.wikipedia.org/wiki/List_of_disability-related_terms_with_negative_connotations "Lame. A reference to difficulty walking or moving. The term has since been adopted into urban slang to generally refer to something or someone as "meaningless" or "without worth", e.g. "He told us a lame excuse for why he had not done the work.""