Bob is thinking that he would have had a nicer time earning his $100 waiting tables for 10 hours.

If that job's available, why doesn't he do it instead? If it's not, what's the point of focusing on his wishing - he might as well wish he were a millionaire.

The missing detail in your story is what Bob did to earn money while Carol's machine was working. If he was doing something better than hand-making widgets, he wouldn't go back to widgetry unless he could sell at a higher price. And if he was doing something less good than making widgets, he's happy that Carol's machine burned down.

Another point is that if Carol's machine can make widgets more cheaply than Bob, then it might make more them, satisfying more market demand. This should cause GDP to rise since it multiplies items sold by price. How common is the case of very inelastic demand (if that's the right term)?

These points probably shouldn't change your conclusion that GDP is often a bad measure.

Disclaimer: I'm even less of an economist than you are.