While the original meaning of yabai still stands, it seems to be used just as often now to denote very positive feelings about something or someone. The first time I heard it used in this way was at a summer camp. As we walked back from the campfire to the hotel (but yes, we still call it a camp), an infinite multitude of stars shone above us, and students screamed out to the sky "Yabai kirei!" Later that year, I recall hearing it at a concert. Velvet Revolver was performing (co-headlining a show with Marilyn Manson, which looking back is a pretty amazing occurrence) and some girls next to me, drooling over a topless Scott Weiland, kept saying "Yabai! Yabai kakko ii!" throughout the show.
Really, though, I think it feels quite similar to an "OMG" in English. Or how, when experiencing or witnessing something overwhelmingly good, we might comment that we're done for. Or we might say we're in trouble when we find someone attractive to an extreme degree. There's something viscerally expressive in this word.
Honestly, I'm not trying to promote this music, but here are a couple of examples of yabai's usage. The first is a song entitled "Yabai," performed by the boy-group Arashi. The guy pictured in the video is Jun Matsumoto, perhaps most well-known for his portrayal of Tsukasa Domyouji in Hana Yori Dango.
and this is a Morning Musume video. The caption under the video,
かっこよすぎてヤバい!is another usage, stating that something is too cool. To tell the truth, I was surprised at the heaviness of the guitars at the start of this clip. It wasn't what I expected from Morning Musume.
In the caption under this one, you can see another way to use the word.