This crazy stunt comes from the same crew that pulled off the two-man Loatheb kill, and uses another pretty funny gimmick. This one uses a combination of Spellsteal on specific mobs, a talent called Incanter's Absorption, and a talent called Burning Determination.
The Bone Armor that is cast by the Death Knight Cavaliers was able to be spellstolen, and it absorbs 1,200,000 damage. You could get up to hundreds of thousands of points of spell damage, in theory. In practice it probably comes out to much less than that most of the time. Still, as you can see from the video, 100,000 spell damage was completely possible. Burning Determination was necessary because those same mobs like to spam Strangulate.
I say 'was' because this has already been hotfixed. According to the comments on Wowhead, they really didn't waste any time fixing it. There were some people who had it crap out on them in the middle of soloing Razuvious, because they suddenly couldn't spellsteal the buff anymore.
This video just goes to show just how creative players can be. The developers and QA team probably didn't even think this combination of spells and talents could do anything remotely like this. Without Incanter's Absorption, spellstealing that Bone Armor would have never been a problem, and it's a talent most players wouldn't take in a PvE build. All it takes is one player saying, "What if..." to start a wildfire in the WoW community, and that's what this did. How many Mages do you think went and tried this after seeing the video? All of them.
I gotta give props to the crew that did this video and the Loatheb kill, they're a mighty creative bunch, in that vaguely exploitative way. They should change their guild tag to <Quality Assurance>.