There have been a lot of factions that were terribly booked (Nexus, WWE nWo, etc.) but were by far not horrible factions. There have been factions that were only meant to serve a purpose (Spirit Squad, Mean Street Posse) who were never meant to be top notch factions. There have even been cases like The Truth Commission, a faction that was over as top heels in Memphis, but just never caught on in WWE. When I think of the WORST factions though three come to mind.
Los Boricuas- For one, I hated the "gang wars" WWE had going on in the mid 90's. I thought all of the factions were bad aside from maybe The Nation, and I felt that it was a little offensive honestly. D.O.A. was bad, but Bryan Adams, Brian Lee and The Harris Brothers at least had matches on a regular basis. As far as Los Baricuas, Saviois the only one I remember wrestling on a regular basis, and the other guys were just taking up roster space. I heard that they were all stars in Puerto Rico, but they were never even introduced in WWE from what I remember. I remember one guy was really hairy, and Edge messed one of them up in his debut.
The 90's NWA Faction- To me, Jim Cornette is the best manager of all time. The guy was gold on the mic, he could get heat like no other and he was as entertaining as they come. Cornette was a wrestling purist and his shoots on WWE TV were good, and should have been capitolized on in a much better way that this. Jeff Jarrett made his return from being a country music singer to being the NWA champion, and we got The New Midnight Express, which is probably one of the worst tag teams of all time, along with a bloated past his prime Barry Windham. I think the highlight of this faction was a decent match on PPV between The New Midnights and the Rock N Roll Express that I'm sure only myself remembers.
Right to Censor- I see a lot of people defending this one on here, and I agree, the concept wasn't bad, taking a shot at a group that is trying so hard to put you out of business. I think Stevie Richards was good in his role as the leader, and this was probably the highlight of his career outside of ECW. I do however call it horrible because of what it did to the careers of everybody involved outside of Stevie. Godfather was over, Val Venis was over, Ivory was a good heel diva, and Bull Buchanon was a good tag team guy that didn't really need to be in another failed faction. None of these guys achieved the success they had prior once this angle was over and I really feel that this was partically to blame. Val and Godfather had a lot of steam going into the angle, I'm not saying either deserved to be World champion, but they were over for what they were. I think RTC should have been a group of guys brought up from developmental, then have them go their seperate ways once the angle had run it's course.