Definition from Wiktionary, the free dictionary
Shortening of "That is too bad." or "It is too bad that"
- (idiomatic) That's a pity; that's unfortunate.
- You can't come to the party? Too bad.
- (idiomatic) It is unfortunate that.
- Too bad you can't come to the party.
Usage notes 
- Too bad is used to express sympathy at another's misfortune, or, with an ironic tone, to express pleasure with or disinterest in another's misfortune.