Worst experiences: Raw chicken on Mexicana and frozen burritos on America West. In my experience, 95% of the time, the issue with airline food is not that it was so bad to start with, but that it wasn't stored properly or heated properly. Obviously, you won't have gourmet cuisine, but it can be quite palatable.
I think airlines should offer cold food in coach on most flights. Maybe a warmed muffin is OK, but many of those hot sandwiches are a disaster. My idea of a perfect meal on a 2-3 hour flight: Choice of a large, fresh, cold sandwich or a salad (with lots of veggies, not just iceberg lettuce), both coming with fruit and cookies. I would simply offering a "vegetarian" option would cut out the need for many special meals.
I think on longer flights, hot meals are more practical, and I think that First Class should have a hot and cold meal option, even on short flights.