It means that not all features they want to include in 2.0 are in yet but there is enough to warrant a release of some kind.
PyPy is generally so stable that people are using nightlies in production, provided they pass all the tests.
Actually, it's because it contains some performance regressions. To quote their release notes:
"This release is not a typical beta, in a sense the stability is the same or better than 1.9 and can be used in production. It does however include a few performance regressions documented below that don’t allow us to label is as 2.0 final. (It also contains many performance improvements.)"
So what does beta mean to PyPy then?