The idea is that it is seldom the case that the check-out workers really verify the item identification with the item being scanned by the bar code scanner. Hence, if you replace the bar codes on a package with a similar (but cheaper) item, you can walk away with a "discount".
Now, this is theft, no doubt in my mind. There is an intend to defraud the vendor from their rightful pricing and therefore it isn't a good thing by a long shot.
The interesting part is how sophisticated the site Re-Code.Com actually is. Not only can you print an arbitrary bar code, but you can find products sold by a particular chain so that you don't recode with a code that might not be in their inventory system (hence causing some difficulty with the check-out people, possibly leading to arrest).
Apparently, the folks at Wal-Mart are trying to get the site taking down. Interestingly, the site is claiming that they are a parody and therefore shouldn't be taken down because of free speach.
It brings to mind a question of whether Walmart could try a DMCA attack against the site, since it is using a technological means to alter the copyrighted material owned by the manufactuerers...