By whom? To me, it was always a fun noise to say as loud and dramatically as possible, so to annoy my younger sister when I read the story to her. I'd always read it as a silly bit of deus ex machina employed to end the story, as we'd run out of letters in the alphabet.

Metaphor for a bomb? Maybe. But I doubt Dr. Seuss was trying to put forward the lesson to children that when you're out of ideas, the thing to do is blow it all up. I honestly think he was being silly for the sake of whimsy and amusement.