It means that if you don't go then you will be at a disadvantage of some kind. (As perceived by the speaker)
It usually implies that it is important to attend.
Jazz speak (and rather square in itself). Squares were people who weren't 'with-it' and by extension an adjective to describe anything not modern, as it was then.
The slogan suggests your credibilty is damaged if you dont attend the event.
It is a putdown. It is a way to say, be there "or there is something wrong with you." Being a square used to mean, one was not part of the "in crowd" nor a popular person, so to be there and enjoy the happening whatever it is, makes you one of us. You don't make the grade if you are called "a square!"
When this "saying" originated, the word square was used to describe someone that was not a desirable person to be around. If you are described as square, you were unpopular and uncool.
I also think nowadays people think of being "square" as being awkward, which could be true as well. Instead of fitting in with the cool people, you stand out in a bad way.