Well, personally I think that bad criticism is like a bad quesstion... it's only bad if it's not given. I think it's unfair, if you see a way that a story could be improved, that you don't give the autor the opportunity of improving it. There is absolutely no point in letting someone think either that their story is so good it can't do with improvement OR that it's so bad no one reads or wants to review it. Both of those are bad but the latter the worse.
What I tend to do if I see things that are weak in a story will depend on the author and the flaw. If I know the author I will be brutally honest in the review because it is only ever a word or two, or perhaps a slip in tense etc and all I have to say is ... It was hilarious when you said He looped around instead of looked around... or something.
If it is a new author or one i am not sure how they will take the criticism I might say something like... I loved the story and your storytellling skills are really strong but I would suggest you look for an editor because your tenses/typos/spelling could so with some work. This is usually what i say when there are just things that need to be tweaked or if the grammar etc is so bad it makes the story hard to read. (haha now those people I'/ve said that to will wonder which one I meant )
If it is something deeper that needs more comment then I send a pm. This is becuase I don't want them embarassed and possibly discouraged in public. However this is a two edged sword because if you don't leave it in the reveiw you might mislead potential readers who will get turned off once they start to read.
I suppose the condensed answer would be. If you see something you want to comment on you should but you should consider the way you do it and the place you do it.