Mitch Ditkoff notes a common misperception regarding bad ideas:

“One of the inevitable things you will hear at a brainstorming session is something like “there are no bad ideas.” Well, guess what? There are plenty of bad ideas….The key for aspiring innovators? To find the value in what seems to be a “bad idea” and then use that extracted value as a catalyst for further exploration.”

I agree.  Good ideas usually start as bad ideas, an insight I learned originally from the folks at S.I.T.. But the question is: how do you extract the value from a bad idea to transform it?  I offer three approaches.
First, look carefully at the bad idea and try to characterize the single benefit that the idea delivers to the customer regardless of how whacky that benefit is delivered.  It is the benefit that you want to hold onto, not the whacky deliver system.  Ideate new ways to deliver that benefit.
Second, what criteria are being used to judge the idea as bad?  Try using the Reverse Assumption technique on those criteria.  Turn them around, challenge them, re-frame them.  Make the seemingly bad idea look good in a different context.
Third, look for what is old about the new idea.  Thomas B. Ward, is his chapter, “What’s Old about New Ideas,” says:

“Structured imagination refers to the fact that when people use their imagination to develop new ideas, those ideas are heavily structured in predictable ways by the properties of existing categories and concepts.”

In other words, we do not ideate in a vaccuum, but rather in the context of what we already know.  My advice is to take the bad idea and look for the original concept that it was built upon.  Can that be taken in new directions using a structured process?
For corporate innovators, I see this as a best practice.  I often ask people what they do with their bad ideas.  If I see a curious look on their face, it usually means they are not taking advantage of this phenomena.
Bad ideas are better than no ideas.