Should a good system sound bad with bad recording?

IMHO. A 'good system' won't make 'bad recordings' sound bad. A 'good system' will make 'bad recordings' sound good. Its all to easy to blame the least expensive item in ones' set-up ie a 'Cd/Lp' as being the culprit for the pain on the ears. No one will ever admit that their expensive piece of kit is really an expensive piece/s of sh....doggie doos.
These are just my own personal views from personal experience in the past.
Crank it up.........

a stereo system is as strong as its weakest link. most stereo systems sound pretty good with good to very good recordings.

it is the better stereo system which can sound good with bad recordings.

Yes. The better the system the better ALL recordings will be.

the better the recordings, the better the system will sound. it all starts with the source.

however, some so called bad recordings are not that bad. it is the stereo system that is flawed.

If good is taken as accurate then absolutely yes, of course it should sound bad

If good is taken as a nice sounding system with plenty of forgiveness, warmth and oodles of extra harmonic distortion in the bass and lower mid then NO.

A system that colors sound in a pleasing way can invariably make a bad recording sound passable. ( a good recording, however, will never shine as much )

Since the majority of recordings are mediocre or mastered for mediocre systems...selection of a system is a matter of opinion/choice and even a very accurate system has its limitations/drawbacks.

Many mastering engineers in studios with $100,000+ systems/facilities will still use something like Yamaha NS10's, just to see how their master will translate to a mediocre system. (the majority of systems can't properly handle the dynamics of lifelike music and lose balance)

Fortunately the odd one slips through....one where the mastering engineer has not been heavy handed with a soft limiter. Some genre's fair better than others.