I would say only in the cases where those people had consistently refused to consider any/all constructive crits previously - ie, all they wanted was praise. And frankly, in those cases, only if required to give a critique would I bother to respond at all. Silence often speaks louder than words.
The "interesting" thing is hilarious. That's also usually the case with "nice." I hate saying stuff you don't mean, though. It reeks to me of passive-aggression, which I hate more than anything. If I have a lot of issues with someone's work, I'll say so. It's not like it's black and white where you have to either fake you like it or come across as a total jerk.
Tell them how bad it is. Seriously. Don't try to lighten it up, or sugarcoat it. I know I hate that. It something is terrible, the writer will probably want to know that. If they don't know what's wrong, how can they ever improve?
As long as one knows the difference between not 'sugarcoating' something and being rude, obnoxious, and arrogant. The idea should always be to help someone improve, not pound them into the ground.
There have already been a lot of good replies, here, but I'd like to add my own perspective, since I'm a new writer myself and I've been at both ends: giving a review on a dismal piece and receiving a review on my own dismal piece. Basically, I think when you point out what doesn't work about the piece, you should be critical but not condescending or scornful. It takes a lot of guts to learn a new skill and even more to show it to someone else. And while you may be thinking, "God, this person needs a wake up call," that's really not your job, especially if this is in a classroom setting. The object is to make a particular piece work, not to make the person realize something fundamental about writing in general or realize that they can't write worth a crap. A critique is just a critique, not a treatise on writing. Remember that you've been there yourself, even if it's been a while. You were new at this once, too, and your skills didn't grow overnight. These people are beginners and you shouldn't expect them to write like novelists. With regards to saying anything positive, I honestly think that if anything at all works about the piece, you should tell the writer. This isn't just to boost confidence; rather, it's important to know both what DOES work and what doesn't work. Some may think the former is unimportant, but I think that to someone new at writing, if you just list what's wrong with it, it's easy for them to lose perspective. They just get this big list of what's shitty about their work, and they might rapidly come to the conclusion that they're no good at this new craft and they should just give it up, when that's not what you meant to say at all. You should give credit where credit is due. If there's no credit due, then there's no credit due. But situations like that are pretty damn rare. There's usually a few things that the author does right, even if they are small. Finally, I think it's a good idea to leave your generic writing attitudes at the door and consider the piece on an individual level. Does it work HERE. I wrote a story once where I had a scene in second person POV, and while I think it would have been valid for the reviewers to say "It sounds out-of-place" or "It's disjointed" or even just, "I don't really like it here in this story," I got several reviews that just told me that I should NEVER use second person and chewed me out for even trying it. I thought that this was not only a bit narrow minded of my reviewers, but I found it very unhelpful: I couldn't tell if these people's negative opinions were formed solely because they didn't like second person on principle or if second person just didn't work in my piece. I ended up shrugging these reviews off and just putting second person in my story because in my opinion, it was right. So I think that you should try not to be prejudice against certain devices when you review. Things work in certain contexts, but not in others. I certainly never thought I would like a story written in the first person collective POV ("we"), and then I read Joshua Ferris's And Then We Came to the End and found myself utterly amazed at how well it worked. So consider your own prejudices before you just tell people that they are wrong, and try to appreciate the work in isolation.
I've learned there is no need to be nasty and every piece of writing can be improved. Every one has to start somewhere. I learned my lesson when I was asked to crit a really awful piece the plot was bland, characters unrealistic, descriptions bizarre etc. Not wanting to hurt feelings I took a deep breath and slept on it. Next morning I sent a list of what was wrong and positive suggestions about how to improve. The piece I got back was amazing, the plot was still bland but the characterisation was great, it was emotional and flowed better. When I am reviewed the worst kind is a shopping list of faults with no clues or indications about how to improve. That is destructive rather than a constructive critique, and an horrendous thing to do to a new writer. Even when the piece is bad it is possible to be positive about how it can be improved. Messing with another author's voice is also unpleasant and something I'm very careful not to do. When making suggestions that involve me tinkering I make a point of mentioning it is because I'm not experienced enough to know how else to explain it and that it is only a suggestion.
Focusing on one area seems the best bet. By overloading the student with information they are liable to tune you out. By focusing on one subject you are likely to make some headway, and then the next paper you can focus on the next subject. The important thing to remember is that learning is a continuous process. There is no way that a thorough critique of one paper will turn the author in a proficient writer; it is only through repeated papers and repeated mistakes that a writer will improve. So, you have you have as many papers as they write to improve their skill, and what they do with your lesson is up to them. Don't focus too hard on making somebody a perfect writer, merely focus on the most outstanding issue.
It's easy to be distracted by what you don't like (e.g. poor grammar, stilted dialogue, etc.). These things are often fixed by their own self-education and practice, and there is little you can do but nudge them in the right direction. Try to figure out what they are trying to achieve and what is hindering them. A good critique will help them write what they wanted to in the first place.
I went to a fine arts college where traditional academics were not emphasized to any degree. There was an English department and a Math department and a science department but the average student only spent about 1 semester total in all of the combined traditional departments to make room for the other 4-6 years we spent in classrooms related to our majors like metalworking, fine art painting, sculpting, GFX design and animation. We had one particular instructor in the English department who had a list of published books numbering at around 10, almost all of them got or exceeded a second printing so I felt she probably could have been teaching somewhere else just fine. I remember one day she told a student that she had no clue this student had such a beautiful control of the written English language. When she asked this student where she had learned to construct these complex writings so elegantly the student responded that she had never completed high school and was admitted into this school on her portfolio. She was shocked that this student had picked up her entire knowledge base of writing from books she had read but with very little formal education. The flip side to this coin is this student had nothing to write about. The instructor loved how she wrote everything but used "interesting" to describe how she felt about what was being written. I always thought it was interesting how everyone know what that means.
