Read it as the past tense of "shall". Because it has already happened, "should" is the appropriate form. You'll see it used in this way to give a sense of "imagine that!" to a sentence. You can also drop "should" and have a simple present subjunctive clause ("that we meet here"), which still has a very similar meaning.

It means that it is a coincidence to meet there. The odds of meeting there were far from good. It should not have happened.