I encountered this phrase in a novel I'm reading, and I think I've heard it before. What does it mean?
That's as may be means that what the speaker says may be true, but it doesn't change your argument or opinion as it is not strictly relevant, or other facts need to be taken into consideration; I can't find any reference for it online but a phrase with a similar meaning is be that as it may.
A rough equivalent would be "that may be the situation, but...".
To use it in a context,
You: "I do not have transportation today."
Boss: "That's as may be, I want you in office in 10 minutes."
An alternative would be:
That may be the case, but...
It usually means that the speaker/writer is acknowledging something, but is about to explain why it may be irrelevant to the matter in hand.
It means that while the speaker agrees with some premise in the conversational context s/he doesn't think that premise excludes the fact/thing/argument s/he is speaking about.
"Hitler was a vegetarian" "That's as may be, but he was still a psychopath."
Brian Cooper's reply above is decidedly misleading in this respect: "That's as may be" as a rejoinder to a claim P connotes scepticism about P, or the other things he says accurately.
But I don't think it is a close synonymous phrase for "Be that as it may," which connotes a corroboration or acceptance of the claim P, albeit begrudging, and prefaces an additional claim.