I think the element of badness itself can push a craft to cult status. When something is bad, it creates a barrier of entry for non-committed fans of the cult. Normal people won't "get it" which adds to the cult's exclusiveness.

In the case of cult status, there is usually something amusing, ironic, or redeeming along with the badness: something to "get" that normal people don't.

The best example of this is The Rocky Horror Picture Show - an awfully bad musical.

As a Rocky Horror Picture Show fan, I have to say that you just don't "get it"! ;)

Rocky Horror Picture Show is an excellent example of So Bad It's Good. It has some very funny characters, catchy tunes, a hedonistic subtext (edit: and yes, text too), and a parody of contemporary scifi and horror tropes.