That is a TERRIBLE hermeneutical translation of that verse, often misapplied by pastors today to urge people not to be fence-sitters.
The context in Laodicia was that on one side was a city with hot springs (medicinal) and the other with a cold spring (refreshing). By the time the water was piped via aqueducts to Laodicia, it was neither hot nor cold, but lukewarm.
Translation - Either be refreshing to the weary or medicine for the sick. If you are neither, you are useless as a church.