Your first answer is right, but it doesn't go far enough. It is a word of power. It is warm and fills you with mirth.
No, you have to realize most of, if not all of the satisfaction that comes from the word sneed comes from the reactions to those that hear it, primarily trannies and those who were around for the tail-end of the 90's.
However, you also must understand that the sign is a subtle joke. The shop is called "Sneed's Feed & Seed", where "feed" and "seed" both end in the sound "-eed", thus rhyming with the name of the owner, Sneed. The sign says that the shop was "Formerly Chuck's", implying that the two words beginning with "F" and "S" would have ended with "-uck", rhyming with "Chuck". So, when Chuck owned the shop, it would have been called "Chuck's Feeduck and Seeduck".