Is there such a thing as a bad idea?

I'm doing the online Technology Entrepreneurship course offered by Stanford this semester. For the first assignment, all participants are grouped with random team members into teams of 10. The assignment asks the teams to brainstorm 5 good startup ideas and 5 bad (eg: selling ice cubes in Alaska) ideas and create business models for both the good and the bad ideas. The second assignment asks the team to choose a bad idea created by another team, and make a compelling commercial for it.

The second assignment description says:

In entrepreneurship, it is very difficult to tell a bad idea from a potentially very good idea. The differences are quite subtle or even non-existent and it's often much more about the team and what they do with the idea. A creative, hardworking team can turn a bad idea into something with a lot of potential. Some go so far as to say that there are no bad ideas. Creativity is a constant resource that your team has that can be applied during the startup process to improve on business models and generate new even better ideas.

In fact, when browsing through some of the bad ideas, I was struck by how many actually have potential. Here are some ideas submitted in the "bad ideas" category that I came across which may turn out to be good ideas:

Selling umbrellas in summer season: The person who submitted this idea is from Europe, and I can imagine how he thought obviously what a dumb idea this was. But come to India or other equatorial countries and see how many people use umbrellas to protect from the summer heat. Disposable paper T-shirts: Not exactly paper, but Lyocell is a fabric derived from wood pulp, just like paper is. And there is demand for cheap, disposable, single-use fabrics in the medical industry (See slide #30 here [PDF]). Spicy ice cream: This was one of the bad ideas selected by my team. But, it turns out that spicy ice cream is a popular flavour with many recipes online.

So what do you think? Do we throw away many "bad" ideas which could be great ideas with a little creativity?