Are we talking Monkey Island 1 & 2 here?
I have a fondness for bad AI. There was a sword and sorcery "walking down the street game" called Golden Axe in the arcades. At onc point you'd be on a cliff edge and a couple of skeletons would appear. They'd run at you and you could jump straight up in the air. At which point they'd run under you and straight off the edge of the cliff.
Another demonstration of bad AI was the hopeless goalkeepers in Emlyn Hughes International Soccer on the C64. If the ball skidded to a stop about 3 steps in front of the goalie the AI would get into a pickle and the goalie would start diving left and right like a lunatic. Allowing an opposition player to casually walk up, pick up the ball, and walk it around the keeper into the goal.
More bad AI. The hostages in Counterstrike. See this old movie:
http://www.youtube.com/watch?v=mxq2QbMg-H8Twisted Metal used to be a good source of laughs. There was plenty you could do in that one. Like driving towards the edge of a building, getting your opponent to follow you, dropping a spring, hitting the brakes, watching your opponent sail over head and off into oblivion.
Then there was North & South. An American civil war strategy game with battles played out as a comic subgame where you could switch between controlling riflemen, cavalry, or canons. Often you'd be down to your last rifleman and despite the odds still end up wiping out the opposing army and gaining victory. Worth a look if you've got a retrogaming mate to play against.