It's suppposed to demonstrate the desensitizing nature of the military lifestyle, and of the brutality that was/is Marine Corps basic training. They lazily trade words that would, in any other place, cause them to separate the speaker from their teeth. Joker casually asks Cowboy to pimp his sister to him.
If you watch the movie seven or eight hundred times, you'll notice that there is not one single neutral or positive reference to women in it.
"...Mary Jane Rottencrotch through her purty pink panties..."
"...the best part of you ran down the crack of your momma's ass and ended up as a brown stain on the mattress."
"I want that head so sanitary and squared away that the Virgin Mary herself would be proud to go in there and take a dump."
"Better my sister than my mom, and my mom ain't bad."
Not to mention that the only women in the movie are two whores and a VC sniper.