Yes it does mean that. Here's where it comes from:
If you are 'using' someone, it means that you are manipulating them for you own purpose. You use tools (도구 .. like hammer, etc.), so someone who is easily used/manipulated is also a 'tool'. While this is where it derives from, nowadays the meaning has become a bit more general to mean anyone you look down upon as being un-intelligent, easily swayed (by popular trends), etc.