I see this phrase on nerd-news boards now and then. ‘Apple is pants’ (or Facebook, or Kindle, or any other gimcrack hype machine). I think that I vaguely get that it’s some sort of putdown alluding to a commodity product that trades on trendiness… is that correct? Why pants?
I think it’s a Britishism, and therefore has no logical meaning.
Pants = underpants in Britain. It’s difficult to adequately explain how that equates to ‘bad’, but it makes perfect sense to us.
Edit: but I’ll try anyway. Conjures up images of something stinking. You tend to wear them to cover your arse (amongst other things). Anything to do with that area is often used to mean ‘bad’ (crap, for example).
I’ve always thought it was a cockney thing: “tops” is considered a good thing; the opposite of “tops” is “bottoms”; “pants” are “bottoms”; hence, “pants” are bad.
Really? What do you call a generic set of leggings?
And is the term “underwear” ever used?
which is why I almost never wear them.
trousers
I thought “X is the pants” has a similar meaning to the “bee’s knees.”
But X is pants (without “the”) sounds like an insult.
The rule isn’t universal across the country. Where I’m from “pants” and “trousers” are interchangeable, and you explicitly say “underpants” if you mean undergarments.
Similarly, “pants” meaning something shit has distinctly southern English connotations to me.
If something is shit, it’s bad, but if something is the shit, it’s good. 
Same with “bad,” “ass,” and “badass.”
“Tits,” however, is an unambiguous term everyone understands. 
Well, except in England, actually. <sigh>
That’s it, pretty much.
“X is the pants” doesn’t seem to be much heard nowadays, though, as I think the negative version has lessened its appeal.
Pants does generally refer to underpants, yes. “A pair of pants” would generally mean Y-fronts or something similar. Some international-type clothing shops refer to jogging trousers as “jogging pants” (or, more moronically “a jogging pant”), but you need to use some sort of qualifier like that if you don’t want to be misunderstood. Harem pants is another example.
Well, if Englishmen would change their underpants more often…