What else does it mean?

• "My beliefs are the default and privileged. You have the burden of justifying your beliefs to me."
• "Get back in your place! Who do you think you are?"
• "Your momma is inconsistent with General Relativity! But I'm saying it using an intellectual meme rather than the low brow meme."

Basically, if someone told me 'Citation Needed!' in the same conversation that they out of the blue told me I was insane then I would expect them to do whatever they could to find a way to sneer at or dismiss the citations I proceed to give them. I would expect them to feel like their grasp for dominance backfired and try to dig themselves out of what feels like a hole.

This isn't to say that 'citation needed' is never used literally or never appropriate. But I usually find that anyone who is actually interested in whether there are citations available tends to use different language in their reply.