How can a computer leverage that tiny extra probability to crack a secret key?
The answer to that depends on what type of key it is, how it's being used, etc. Certainly, the bias would make a brute-force attack easier, but you probably wouldn't need to worry about that, regardless.
Your professor, though, is trying to answer a different question. He wants to know, and wants you to think about:
How small does the bias have to be in order to ensure that no one can leverage it to crack a secret key?
Note that this question is general: it makes absolutely no reference to what kind of key is being generated, or how it's being used. And this is how it should be: we're designing a general-purpose PRNG, so we shouldn't make assumptions about those things.
Suppose we used this PRNG to generate a 128-bit AES key. Well, assuming the bits are independent (but have the 1/1000 bias), then some math shows that the statistical distance between the result and a truly random 128-bit value is about 0.018. It follows if you used this PRNG in place of some mathematically perfect one, an attacker might be able to increase the chances of a successful attack by as much as 1.8% (but by no more than that).
Is this something you should be worried about? Well, if it's a 1.8% increased chance of someone decrypting a harmless IM conversation you had with a friend... probably not. On the other hand, if you're encrypting your bank password or a set of nuclear launch codes, a 1.8% increased chance of being compromised is probably an intolerable risk.
The 1.8% is an upperbound. We might not be able to find an attack that obtains that advantage. But by limiting the bias to something like 2^{-80}, we can safely stop worrying about the matter entirely.
The theorists would define a bias as "negligible" if it decreases "really fast" with respect to some adjustable parameter of the PRNG. This definition aims to ensure that we can always choose a value for the PRNG parameter such that (1) it's bias is quantitatively really small, e.g. 2^{-80}, but (2) the PRNG is still efficient.
Ultimately, however, you have to fix the parameter when you go and actually start using the PRNG. At this point, you have to decide what concrete value of "negligible" you're comfortable with. This is a judgement call, but any reasonable PRNG will let you put it safely in the "we don't even have to worry about this" territory and still produce outputs as quickly as you could ask for.