Wow, I had no idea that the phrase goes back that far but I hear this today in casual Australian speech.
Here, it can indeed mean a sad bunch of people but you could use it to refer to other types of groups as well.
For example, a conservative person might say that unemployed people on the pension are 'a sorry lot'. (Of course, I'm not suggesting for a moment that this is the case!)
Alternatively, you might hear a teacher saying to rebellious students, 'You're a sorry lot, you kids!'
Perhaps, at work, I might refer to a group of arrogant customers as 'a sorry lot'.
I'm not going on any dictionary-esque definition but this is based on how the word is used in everyday Australia. I suppose that you could sum it up in saying that somebody will say it about a group that they consider to be misfortunate or inferior (among other things).
I think that the previous answer is certainly correct but I suggest that the definition is wider in scope. 'Sorry' and 'lot' don't need to be translated individually and literally as it is the two words together that create the meaning of the phrase. I have no evidence to support this, as yet, but I see the phrase as an idiom.