SYKO comes to us from a member of our Alaskian platerazzi, MooseNuggette. I assume this plate is referring to this drivers mental status, "psycho." According to wikipedia: Psycho is a slang word for a person who is either psychopathic or psychotic. The term is often considered mildly offensive or derogatory.
Yeah it sounds like a great idea to give a license to someone who frequently loses contact with reality.
Oh, and have I mentioned the delusions and hallucinations? They make driving such a task. Watch out for that giant purple-spotted unicorn near Main Street. It will eat you!