Theoden made a bet he could beat Grima with two arms tied behind his back.
or...
Theoden: None shall pass.
Grima: Both your arms are cut off!
Theoden: No they aren't. The way I have my garments draped only makes it look like I have no arms. It's a mere illusion to trick opponents, for I can still wield a brand.
*stabs Grima in one swift motion*