If I'm guessing right (and I'm probably not)... it refers to the bird, the budgie, right? The Speedo makes it look like the man has a budgie tucked in front and is trying to "smuggle" it somewhere. Maybe?
I've only heard of "plum smugglers" which is pretty much the same idea, but with hot pants... like the dude on Reno 911.
Anyhow, about the Speedos... I'm very fortunate in that swimmer boys are HOT. HOT HOT HOT... and speedos are worn a lot... I have no problem with this.
Sometimes... um... unfortunate... things will happen, but for the most part, the good outweighs this.