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Quite a few things, actually. First is in Fitzgerald's use of color throughout the novel. This gray would represent a "dead" area, without the life and vigor that other colors of the book bring about, like green and yellow. In that sense, this is where Myrtle dies, Gatsby's dream dies, Nick's hope for something good dies, etc. etc.
This place is also indicative of Fitzgerald's (and subsequently Nick's) view of life. It is his belief that man destroys what is good. This setting of the book shows a once lively place that has been covered in soot and ash from modern industry, a visual disgrace created by man. Tying it back to the plot, this is again the place where all of our character's dreams come to a crashing halt.
The description of the Valley of Ashes lies in the first few paragraphs of Chapter 2 in the Great Gatsby. It is described as a plain half way between the West Egg and New York that is bleak and gray. It is made so, because the Ashes from New York City are dumped there, and men who are also described as ash gray work daily shoveling the ashes.
Fitzgerald describes it thus:
This is a valley of ashes — a fantastic farm where ashes grow like wheat into ridges and hills and grotesque gardens; where ashes take the forms of houses and chimneys and rising smoke and, finally, with a transcendent effort, of men who move dimly and already crumbling through the powdery air.
Above this ugly scenery is a huge billboard of Blue Eyes staring down from the TJ Eckleberg sign advertising the Optometrist business. The area is hemmed in on one side by a dirty river, and on the other by a train track where the train stops each day so the rich can stare at this gray world.
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