Is it a joke?  Yes.

Is it real, and can be used to purchase real merchandise? yes and yes.

The following for doge has exploded in it's own microcosm on reddit and various forums, social media and exchanges in a relatively short time.
While this explosion doesn't lend to it's credence as a legitimate currency, rest assured it is very real and is already at a +$2 million USD market cap, on one exchange and has at least one +10 GH/s pools dedicated to it.