It means that somebody has achieved / created / done something that exceeds the - already very high - expectations of the commenter. "You do great things all the time, but this is even better!" Imagine you have a friend who regularly paints the most amazing paintings, a really skillful artist. One day you enter his gallery and notice he just painted the GREATEST painting of all times. This is a situation where you'd tell your friend: "Oh my god, you've outdone yourself!!"

you've surpassed yourself, you've done something excellent…