Is a first draft ever too bad?

I ask myself this a lot. It's one of the reasons why I'm hesitant to edit. Editing is a daunting task in the first place, but when there's seemingly little to work with, it's hard to find the diamond in all the rough. This thread  I found on a writer's forum a while back is pretty inspiring, at least from the perspective that no writer likes her first draft. If you're the rare writer who writes clean, readable first drafts, I hate you. I'm kidding. (Not really.)

Mine are always, always, my way of working out relationships between characters. I haven't found a way to circumvent this except by writing a draft with a lot of talking and very little action. Sort of like a script, but a script for a weird indie movie that's awesome or awful because so little happens, but you're sure it's on either extreme of the spectrum. And the first reread is always embarrassing.