One of the perils of being friends with other writers is that inevitable moment when you exchange creative works. Sometimes this comes early on, sometimes later, but it does inevitably happen. This poses one of two problems - either the other person is really good, in which case you start to feel inadequate, or they're really bad, in which case you have to start making excuses or forgo the friendship. (Or possibly more, if they're in the "more than friends" category.)
Come to think of it, it's kind of like sex, only no one has to actually get naked. I could make the metaphorical comparison that as a writer when you show someone your works you are baring your creative soul, but your creative soul doesn't have unsightly tan lines or surgery scars or those extra fifteen pounds that just won't go away. The worst your creative soul has to bare is the occasional dangling participle or end-of-sentence preposition.
Just because you cringe while reading the work doesn't necessarily mean the other person is a bad writer, of course. Sometimes it's simply a lack of craft. They've got a good story lurking in there, it just has to be found. Then you have to gently guide them to it without hurting their feelings. (As a word of caution, always make sure they intended to write humor before telling them how funny it was. Or else be prepared to stave off an hours-long diatribe about how it was meant to be filled with pathos and a dissertation on all the suffering of the world as expressed by the fluffy kitty whom you compared unfavorably to Gene Shalit's hair because you thought it was a stroke of comic genius.)
Sometimes, though, it's just bad. It's got so much tell that if you played poker with it you'd never have to work again. There are dialog tags that somehow wandered in from some other playground game and are now hopelessly lost trying to play crack the whip. Then there's the redundant purple prose that makes "It was a dark and stormy night" look like Hemingway. Then you have a couple of choices - you can be honest and tell them it sucks, whereupon the relationship hits that phase known as "sleeping on the couch." You can pretend it doesn't, but of course that leads to other trouble down the road when they keep sending you stuff. Or you can try and help them.
Sometimes though they're just beyond help and should be gently encouraged to take up other hobbies. Like crocheting. Cause everyone likes sweaters, don't they?