“Beggars can’t be choosers” means that if you beg for something free, you don’t have a say in what you get. It’s something you say to someone who is getting something without working for it, and then complaining about what they got. It’s not really an insult, but it is something you would say to someone who is complaining about something they got for free, so it is a bit of a reprimand. You might also say this if you yourself got something free, and it turned out to be of poor quality – instead of complaining, you would say “Oh well, beggars can’t be choosers.” Yes, it can be an insult, but it would depend on the context. Someone who begs obviously does so because they desire something that must be given to them by someone else in a position to be charitable, someone of superior circumstances; they beg because they want something they themselves cannot afford, they’re impoverished in that respect. One who must beg is in no position to make demands, so they should appreciate whatever it is they can get.
Those in dire need must be content with what they get. For example, The cheapest model will have to do–beggars can’t be choosers. This expression was familiar enough to be included in John Heywood’s 1546 collection of proverbs.
The phrase “Beggars can’t be choosers” references the idea that those who find themselves in a situation of need must not be selective about what help or resources they accept.
The literal example would be a beggar (homeless or impoverished individual) being offered a sandwich and saying “no thanks, I don’t like tuna”.
An alternative example may be a man who finds difficulty in attracting women rejecting the advances of a girl based on her appearance, in which case his friends may say to him “beggars can’t be choosers!” In such a situation, the idiom may also be used as slight insult as it implies that the gentleman in question is a ‘beggar’ with regards to the attentions of the opposite sex.