Alex - I want back the 5:59 I spent watching that. I don't think this would be considered a "B" movie or "C" movie.
It's more or less a tongue in cheek parody of B-list 80s action movies, which is why it's so awesome.
No such thing as a "C" movie, Russ. The term "B-movie" came around in the age of the double feature. You really made a day of going to the movies back then, easily three to five hours spent within those walls. The closest equivalent to the term "B-movie" would be from music - "opening act". It was the extra film you showed to pad out the bill. You'd start with some cartoons, a newsreel (in the pre-TV days), ads for upcoming features and to entice you to buy at the concession stand (where theaters to this day make the bulk of their income) and then the "B-movie", functioning like sort of an appetizer to the "A-movie", the main show of the bill. The B-movie tended to be shorter, lighter material, between an hour and ninety minutes.
Some theaters would also show "serials", the pre-television equivalent of a TV show, with a new episode every week - it encouraged repeat business. Most were only a half-hour or so per episode, about 10-15 weekly episodes for the entire story, very cheaply made, and were either Westerns or science fiction. Depending on the length of the B-movie and the whims of the theater owner, this would be shown either with the B-movie or perhaps even to replace the B-movie.
It wasn't until the 1950s that B-movies started getting a bum rap. Serials and newsreels were pretty much done with the advent of TV, so former serial directors would turn to doing their low-budget productions as feature-length films, which is why there was such an onslaught of cheap, bad films of the era, in particular monster movies - a decent rubber suit was considered good enough for most, basically being the largest expenditure on the "special effects" budget.
By the 1970s, double features were becoming a dying breed, one that was pretty much executed in the 1980s. People had less free time and couldn't spend a whole day at the theater, and with the advent of the multiplex theater, you could be running many movies at once rather than only two movies on one screen. Studios rushed to fill that need, hence a new wave of B-movies were born, where instead of being the weak half of a double feature, they were the main attraction of a single-film presentation, though not usually playing in the biggest auditorium in the multiplex, reserved for blockbuster films that could fill every seat available.
Wow, did I go tangential... I should adjust my meds, that's the second time today I've done that!
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