From the Super Mario Wiki
Stupid Bombs are explosive weaponry built by the Koopa Troop in the Nintendo Comics System issue "Duh Stoopid Bomb!". Stupid Bombs are apparently filled with a gas that lowers the intelligence of anyone who inhales it. This gas is released when a Stupid Bomb explodes; detonating a Stupid Bomb is rather easy, as it can simply be dropped to explode.
It is later revealed that counter-agent to the Stupid Bombs, called "Smart Bombs" were created. These Smart Bombs actually worked too well, making anyone who breathed in their fumes super-intelligent.
The production of Stupid Bombs was probably stopped, as they seemed to cause more harm than help to the Koopa Troop, having decreased the intelligence of all of Bowser's Shy Guy minions.