To wipe out is to completely deplete or use up. If you wipe out your grandmother's entire batch of brownies, it means that you eat every single last one of them.
You might wipe out your life's savings gambling in Las Vegas, or — more positively — wipe out your credit card debt by paying a little each month for a year. In either case, you've erased or eliminated something. Sometimes wipe out is used to describe a truly terrible event, as when a disease wipes out a country's population of songbirds.