This happened to me with skating. $35 Wal-Mart board, 2x as thick and heavy, junk bearings and wheels. When I stood on it and it barely rolled, I decided skating wasn't my thing.
So I suppose the lesson is: if you're serious, have someone who knows what a guitar is supposed to feel and play like if you're going to pick one up used. I've bought a 30$ electric that I still own and play, and a $100 one that was total junk because I hadn't handled enough guitars at the time to know better.
I don't think that's true for a beginner who can't really tell the difference, and I think that's also a discouraging sentence for people who are wondering if they should try learning guitar.
Yup. My first (and only!) guitar is an Ibanez Gio. I paid $55 for it and a practice amp. The amp sounded like garbage, but piped through a $100 Peavey Vyper or through Rocksmith and it sounds pretty good.
But I'm an extreme noob. I imagine an experienced player could pick up on all the shitty sounds it produces. The only time I ever notice it sounding bad is when the strings need replacing and the pitch of a note wobbles all over the place and they go out of tune in 15 minutes of playing.