It's a joke about binary.
1 byte = 8 bits = 28 values = 256 possible values.
To understand part of it, think of an odometer in a car. The starting value is 000000, but if you drive backwards for 1 mile it would read 999999.
The genie made the original wishes 0, then subtracted 1 wish, and in binary subtracting 1 from 0 is like running your car's odometer backwards, so the reading went from 00000000 to 11111111, which is the highest value allowed - 255.
