Originally Posted by Elfwreck
It comes from the TV show Happy Days. During the later series, when ratings were flagging, the Cunninhams went on vacation to the beach, and Fonzie rode waterskis to jump a shark
(warning: TVtropes link), which was received as a publicity stunt to increase ratings with no regard to the internal storylines of the show.
It's come to mean "blatant attempt to draw in new/lost viewers that interferes with current viewers' enjoyment."
It's more "this is the point at which the creators lost track of what made the show good in the first place, and it was never as good again."
For Happy Days, the shark jump episode marks the point at which the show deviated completely from its original premise ("American Graffiti" style nostalgia sitcom about Richie Cunningham and his friends) and became "The Fonzie Show," which was not nearly as good.