You're actually both right.
It was, in fact, at one time, a real excerpt, from "de Finibus Bonorum et Malorum" (Cicero, 45 BC)
Here's a portion of it. Try it in google translate.
The chopping off of "Neque porro quisquam est qui" happened long ago, as did the typo turning "dolorem ipsum" into "Lorem Ipsum".
More recently, lorum ipsum generators turned it it into full-on gibberish.
It was not, however, always gibberish.