How bad is it? It's "unbelievably" bad.
Should you see it? Yes. "It's too good to believe."
The good news is that this film is a laugh riot of a terrible film. The bad news is that I'm certain that it's a fraud, an intentionally bad film passing itself off as unintentionally bad, just like "Birdemic," only done much more deftly.
Though the film is dated 1989, there's a calendar in one scene that reads "1991" and the film doesn't seem to exist anywhere before Joe Bob Briggs released it on video; trying to track down its history, one gets ever more suspicious. It's just too good - the editing manages to milk the comedic effects, which takes real professionals. It's well-shot and well-directed - accentuating the terrible script, acting and dialogue. It doesn't have a single dull stretch; an impossibility in bad films.
One actor is killed four times. A house on the beach becomes one in the suburbs. Terrible one-liners that are racist, sexist (often belittling the lead actor) and homophobic. Cheesy action scenes involving bad guys with mullets. Bad synthesizer music that doesn't fit the scene. The lead actor's hair changes to a wig that doesn't match.
Robert ("Maniac Cop") Z'Dar and Melissa ("Vampire Cop") Moore have roles, Z'Dar unconvincing as a Japanese character.
Nonetheless, it's very funny and definitely worth seeing.
Added 2/20/2015: Having seen other films by the same director, I now think that this was unintentionally bad, at least on the director's part.