Originally a critique of the invasiveness of Surveillance Culture, triggered by the boon of the new ubiquity of the iCup. A play on the name to imply hyperbolic invasiveness, as the device was ever-present and could not be easily stored in a way that its camera or microphone were obstructed.
Originally, I See You Pee involved comedic representations of an iCUP watching people doing their most private business. iCUPs were often anthropomorphized into secret police agents and sinister conspirators. "Trust No Cup" was a popular phrase that arose here.
As a response, the meme was Supplanted by a Countermeme, an ironic reversal of the concept under the same name. The new entries to I See You Pee (posted by Techno-Optimists, Techno-Fetishists, and other subspecies of Consumer Moron) involved hyperbolic acceptance of surveillance and positive anthropomorphism of the iCUP.
In the end, the latter movement won this meme. People know surveillance is bad, but they like their stupid toys and comfort.