At this point in the story, in chapter 3, Billy finds himself in a boxcar as a prisoner of war. The boxcar is crowded. The other prisoners of war pass around a helmet to be used as a chamber pot. German officers are writing on the boxcars to keep track of how many prisoners are in each. It is in this context that one of the prisoners, the "hobo," says to Billy, "I been in worse places than this. This ain't so bad."
His utterance is significant in part because it contributes to the dark, deadpan humor which informs the tone of Vonnegut's writing. This is the same tone which is exemplified by Billy Pilgrim's repeated phrase, "So it goes." Both this phrase, repeated so often by Billy, and the "hobo's" aforementioned utterance, point to the fatalistic resignation with which so many of the characters accept their fates. This contributes to the dark, deadpan humor, but it also helps to emphasize the exhausting, draining relentlessness of the horrors thrown up by the universe.
The utterance by this man also takes on added significance when considered alongside his other utterances. Earlier in the story, he tells Billy, "I been hungrier than this . . . I been in worse places than this," and a little later he says, "You think this is bad? This ain't bad." These are in fact his last words, before he dies. The fact that he repeatedly insists that things aren't so bad, and then dies in a crowded boxcar as a prisoner of war, adds a little pathos to the story. We pity this man for the desperate life he has lived, and for the relativism of his optimism, which only highlights how desperate his life has been.
His death is unsentimental, greeted by Billy with his usual refrain, "So it goes." At this point his words, "this ain't bad," take on an added irony, and an irony tinged with tragedy. Perhaps, after all, he was right. Perhaps his miserable existence wasn't "so bad," at least not when compared to the meaninglessness and seeming insignificance of his death.