It is an expression meaning very, usually a great distance rather than a short distance. This is an answer, not a comment like that way up there. Way far, way far away. Way up there, way down there, way over there, way way, away, way the heck over in Oz.

Hello, I agree with Fedieson. "Way" is also used here simply to emphasize the distance, even if it might not actually be far. For example, your brother asks you to hand him the pencil that is right by him, and you say sarcastically, "Sure, because it's way over there." If I am cooking and need a spoon, but can't reach it, I might ask my husband, "Can you get me that spoon? It's way on the other side of the stove." Hope that helps, Best, Martha

In this case, it's used to exaggerate distance. "It's way too far" "I'm all the way over here." Typically it's used for things that are far away from each other.