This is a climatic moment in this play. Hamlet has struggled with his motivation to commit revenge on his father's behalf. He has felt that he should do it, but has been unable to muster the courage to be so murderous. However, at the end of this scene, he insists that he will be more aggressive:
O, from this time forth,
My thoughts be bloody, or be nothing worth!
What spurs on his "bloody" thoughts is the sense of shame inspired by Fortinbras and his army. Hamlet has learned that Fortinbras intends to attack and capture a piece of Poland, a bit of land that has little value in it. The value, instead, is that Fortinbras is looking for recognition and power. Despite that shallow impetus, his army will, for loyalty's sake, go forward with him in battle.
Hamlet realizes that if this is the case, then he himself - who has the moral right to avenge his father - has been weak in comparison. With such motivation, nothing should have held him back from attacking, and Hamlet is convinced that nothing else should.
When Hamlet observes Norwegian forces massing to prepare for battle over a relatively worthless piece of land, Hamlet is struck by the lengths that Fortinbras will go to on behalf of his uncle, the king.
Hamlet contrasts his own lack of action in avenging his father's murder, his mother's defilement (as he sees it), and the usurpation of the throne that should be his, with the willingness of the Fortinbras to risk thousands of lives for small territorial gain.
After the conversation with the Norwegian captain, Hamlet sends Rosencrantz on ahead of him. In his soliloquy, Hamlet concludes that if a man does not make use of the gifts God has given man ("capability and god-like reason"), he is no more than an animal. Hamlet weighs whether it is his own bestial nature or "craven scruple" that is holding him back from exacting the revenge owed to his family, his kingdom, and himself.
He knows that a good king should not resort to violence unless "honour's at the stake" and realizes that in his case, honor is exactly what is at stake. Hamlet's concluding words at the end of the scene show the audience that he now believes that his thoughts need to be focused on action--or his thoughts will be worthless.