Green’s Dictionary of Slang

(Aus.) second-rate.

1919		W.H. Downing Digger Dialects 14: bug-house — Inferior.
1924		(con. WWI) A.G. Pretty Gloss. of Sl. [...] in the A.I.F. 1921–1924 (rev. t/s) n.p.: bug house. Inferior.
1934		J.M. Cain Postman Always Rings Twice (1985) 158: Let’s let Goebel keep those bughouse cats for their board.