I think it just means Y is pretty good. A literal interpretation might be "This is the greatest achievement since X happened" but nobody really means that. If you say "The best thing since sliced bread", it's pretty clear that you're not literally claiming to have examined the history of human achievement since 1928 (when Wikipedia claims sliced bread was invented) and found that you've been able to make an objective assessment that Y is better than hydroelectric power, The Dark Side Of The Moon, the universal declaration of human rights, or hotpants. It just means that it is a comparatively sit-up-and-take-notice, changes-the-way-we-live innovation. Or isn't, but that's the kind of hyperbole that you felt like invoking.

If someone actually said "the best thing since sliced bread", then yes, it's almost certainly pure hyperbole and if they meant it literally they have only themselves to blame when people don't realise that. But if they said something more specific, such as calling someone the best actress since <some actress who is actually within living memory>, it's not so clear. There's probably a general hint of "comparable to" or "merits mentioning in the same sentence as" in there, at least.