I often hear people saying something that sounds like "What is that mean" on TV and the Internet but I am wondering whether they really mean that or they actually say "What does it mean". If the latter, why is it so common?
Where enunciation is not critical, pronunciation will always tend to elide words or omit consonants, or both.
What does that mean? will, where stress is not important, always tend to What's that mean? or Wad's that mean? and will probably end up as Wassa' mean? The glottal stop which replaces the terminal -t on that is likely to be retained, but only as a stop, not as an enunciated -t.
Anything which means the mouth and tongue don't have to move very much is up for adoption.
Yeah, it's just "What does that mean" all elided together. There should be a detectable difference between an elided "what does" and "what is", something phonetically like "wutuz" vs. "wutiz".