My feeling up until recently was that anything could be salvaged with enough finessing. But today I reached a chapter that I knew needed massive changes. I knew the ending it needed to come to, so I deleted almost the entire thing and re-wrote it from scratch. It felt liberating -- challenging even -- to start with a fresh page and come up with something better.
In a way it feels like the first draft was really just a way to figure out how the thing should end. Once you know your ending, you can go back and figure out a more dramatic way to get there.