There is some debate as to who said this expression first - I know that I heard it more than 20 years ago and used to have it printed out and taped to my computer display so I would remember it each day.
For some reason, in the U.S., it is "expected" that one should be busy. We don't focus on what they should be busy working on..... what project, what deadline. Instead it is almost a badge of honor to let someone know how busy you were today - or this week, month, or year.
Busy doing WHAT? So what if you are busy - did you get anything important done??
Next time don't be so quick to respond when someone tells you how busy they are - instead focus in on what it is they are doing that is taking all of their time. Appreciate that they are working on something important - not just filling time.