I always interpreted it as "unable to be adapted faithfully."
For instance, in my earlier post I mentioned the live-action Ghost in the Shell, which in some parts Hollywood almost-mechanically adapted to be shot by shot identical to the original animated film, while completely missing the point with the racebent casting choices and much of the writing. I would count that as a poor adaptation, but not adapted so faithlessly that it has no resemblance to the original work.
Then again, Blade Runner is a loose adaptation of PKD's original story, yet does its central themes justice. So I guess "unflimable" is a relative term. Maybe it could ALSO just mean "no demand or desire to see adapted for film or television."
My overall point is that it's a golden age of IP and with the mainstreaming of nerd culture (and the endless demand for content from the streaming studios), all sorts of works that were once considered unfilmable are about to see the light of day.
"Unfilmable" for me is James Tiptree Jr.'s "Up the Walls of the World". Half the novella is spent on a gas giant inhabited by giant telepathic manta rays farting jet fire. The other half is spent in the <body> of a solar-system spanning semi-material, invisible/ dark <creature-ship-machine> where all the protagonists are transferred as disembodied minds. The day is saved by a strong telekinetic/ telepathic computer programmer who merges with the <beast-thing-machine-of-the-stars> and a spontaneously arisen AI from Earth (early '70s too... It Came From The Mainframe).
