I think that there's a difference between something someone has made recreationally, and something they're selling, such as at a craft show. There's never a need to be rude, but with someone selling their products, if they ask how I like them and I think the workmanship is poor, I would say so. It's pretty important information a business person needs. If it's someone who has made an item for the fun of it, I would always find something to compliment.