That picture looks terrible.  However, all may not be lost...

Believe it or not, some of the so called "sewer pipe" Krag barrels are capable of producing fairly good accuracy with jacketed bullets.  The pitting and garbage will make mincemeat out of a softer cast bullet, but the copper jacket is less susceptible to picking up crap as it travels down the bore.  As long as the barrel is safe for shooting (no cracks, bulges, or other dangerous damage), you might hang onto it...  Fire a couple jacketed rounds through, and see what she does.  You might be surprised.