there was a 'real' red herring in monkey island, but it served a purpose.
Yeah, I know:
An example of a useful red herring, though, can be found in Monkey Island - I suspect it's one of the (many, many) things that put that game on the map.
Jamespking: I wouldn't know about "bad design". Red herrings make the overall game harder, generally speaking, but it's not as tedious as, say, unoriginal mazes. Well-designed and implemented red herrings (again, Sorcerer) do stick in your mind, and you remember them as well as the main game itself.
Maybe we don't see them so much any more because IF and adventure games have become much more linear (generally speaking). Red herrings don't make sense any more, unless it's to intentionally trick a player into going down a wrong path of reasoning when, if he chooses to explore further, he'll be able to make the right choice instead (case in point: Heavy Rain, near the end).
Red herrings may be part of bad design, yes - in very open games with puzzles that don't even look like puzzles, lots of red herrings will confuse to the point where one just can't take it anymore. But the RH in themselves are hardly bad design.
Really, "waste of time" is par for the course in an open game with lots of exploration: you have to experiment, and waste some time, and flush a lot of good ideas that just didn't pan out. RHs just made the matter a bit more devious - and more realistic - by forcing you to accept that not everything has to have a use.