It depends on what your definition of "good/bad" coach is. One might argue that a "bad" coach shows undue preference (play time, leadership roles, play opportunities, etc.) for his/her child and/or friends of the child.

You can have expertise in how to teach players the sport, but also make detrimental choices because you are biased (consciously/unconsciously) in a way that is beneficial for your child. This is human nature to want your "own" to be successful. This leads to discontent amongst players and parents who realize that politics/friendships/and ultimately connections supercedes ability and/or hard work. Take this piece out and automatically the perception of a coach changes more favorably.

Anecdotally, I have only experienced ONE coach across three sports, who has not shown obvious preference for their own child player in a number of different ways. I don't think the issues which come with most parent coaches will ever be resolved; however, efforts by teams/clubs to limit the number and also infuse nonparent coaches on the sidelines will help.