I wouldn't say the workshop of KOTSW was "hysterically awful," Eric, but it certainly wasn't great. Only one movie was staged, and its scenes were meant to parallel the story of the two men. It didn't work: The movie was supposed to be a cheesy musical comedy, but they kept forcing in dramatic songs ("I Do Miracles," the title song) to keep the parallel going. It all became very uneven. The movie scenes weren't a respite from the horrible reality, they were a variation of that reality. Likewise, non-movie songs came out of nowhere, without any dramatic buildup to make them necessary. It wasn't terrible, but dramatically weak.
On the other hand, McNally's book had some very strong lines that I wish had been kept (my signature, for one). In the current script, after Valentin yells at Molina for poking fun at a tortured prisoner, he ends the scene by saying, "Look at me. I'm shaking. I'm as pathetic as you." And blackout. Originally, there was some more to that scene. In the workshop, Molina responded, "No, you're not" to that line. Three little words revealed a lot about the character and his self-perception. So it wasn't all bad. Just...mostly.
"I hate musicals... People don't sing in real life."
"Well, maybe they should."
--Kiss of the Spider Woman (cut line)