This is a metaphor. In the old days before Islam, Arabs used to curse time whenever a problem or an accident happened to them. So the prophet said don't curse time for it is Allah Who is the Time (which is a metaphor) which means don't curse the doer of the problem or accident because the doer is Allah (before they knew Allah they thought it's the time which is the doer and this should be no longer accepted in Islam). Of course time is something Allah created and time doesn't have the ability to cause problems to people. So Allah is the Time means Allah is the doer so don't insult the doer.
Moreover a good Muslim should submit to Allah's will. If something good happened to him it's a reward or a test (will he thank Allah?), and if something bad happened to him it's a test (will you be patient and thank Allah for all the other good things he gave you?). When a problem happens a Muslim should be patient and thank Allah. Read the following verses:
Who, when disaster strikes them, say, "Indeed we belong to Allah, and indeed to Him we will return [2:156] Those are the ones upon whom are blessings from their Lord and mercy. And it is those who are the [rightly] guided. [2:157]
No disaster strikes upon the earth or among yourselves except that it is in a register before We bring it into being - indeed that, for Allah, is easy - [57:22] In order that you not despair over what has eluded you and not exult [in pride] over what He has given you. And Allah does not like everyone self-deluded and boastful - [57:23]
No disaster strikes except by permission of Allah. And whoever believes in Allah - He will guide his heart. And Allah is Knowing of all things. [64:11]
P.S: Metaphors are extensively used in Arabic like (This man is a Lion = This man is strong and brave), (This athlete is a rocket = This athlete runs very fast).