Bono's words in Chicago '87 sum it up... Bad is about a friend of his who died of a heroin overdose. Also about the conditions that make such events likely to happen over and over. Bono once commented in another concert (in the UK) about people laying in gutters with needles hangin' outta there fuckin' arms while the rich live indifferently to the suffering of the less fortunate.
Philip Collier bytomaticaol.com (contributed before the 20:th of February 1998)
Bono introduces the song with the following words in the concert at Eriksberg, Gothenburg in Sweden 1987: I wrote the words about a friend of mine, his name was Gareth Spaulding. And on his twentyfirst birthday he and his friends decided to give themselves a present of enough heroine into his veins to kill him. This song is called 'Bad'. According to some information, Gareth should have died during the War tour.
Jonas Steverud (Maintainer of U2MoL) (25:th of January 2004)