I agree mostly with Pilko, not so much with Darian (sorry Darian). I would say that more than anything it's sarcastic... It's basically saying it's soooooo bad, that it therefore becomes good, but only because of how bad it is. As Pilko said, it's good because it is soooo bad haha. It has nothing to do with being "bad for you", such as Darian was saying with chocolate / sugar. I guess you could come up with a certain context in which it would be that way, but usually it is as Pilko was saying.

Plan 9 from outer space is so bad that it's almost good. Zardoz outfit is so bad that it's almost good. In fact Plan 9 in its time was voted the worst movie ever produced, but today it became cult. Because it is kitsch, it reaches summits in coolness ! Same for the outfit. Of course that can be applied to many other situations. When something is so bad, then it becomes unique in a way that it worth being remembered and for that reason almost becomes good. Same as when it is the worst day of your life, everything goes so wrong that it becomes laughable, ludicrous.

Too much suger is so bad, its almost good. This can be used when handling certain situations when the person tries to decide with in themselves if what they desire is really what they want. Example: Cake is so bad, its almost good Example: Chocolate is bad, its almost good.