That is the literal translation/interpretation, "you ain't shit" = "you are not shit". It could mean that, "i expected you to be shit, but you are unexpectedly

That is the literal translation/interpretation, "you ain't shit" = "you are not shit". It could mean that, "i expected you to be shit, but you are unexpectedly good", depending on tone/context. But the much more common interpretation "you ain't shit" = "you are less than shit" = "you are worthless/nothing". See also "it don't mean shit".