Pedobear "pops up wherever people are being creepy about kids on the Internet," as Gawker notes. He is, in fact, meant to mock pedophilia.
Pedobear is a shorthand for saying, "You're being creepy about a kid." If anyone on 4chan posts a picture of a questionably young looking girl in a sexy pose, someone will inevitably reply with a pic of Pedobear. Many times, Pedobear is added to a picture to point out real-world sexualization of presexual kids, but it's alternately shown as an acknowledgment of being inappropriately attracted to a child.An example would when when Pedobear images were used to deface this billboard (above) advertising the Pope visiting Malta. We assume we don't need to explain the connection between the Pope, Catholic priests, and pedophilia.
The San Luis Obispo (SLO) Police Department, however, although they say they "get" the idea of Pedobear, are warning people about him. They have produced a two page Public Safety Information Bulletin: "A Seemingly Innocent Menace: An Introduction to PEDO BEAR."
Watch a short news report on the issue from local media below (obviously the law has gotten the word out), as well as reading the bulletin, below:
SLO Police Pedobear Warning