I always thought the knife was completely useless in any Resident Evil game that wasn't Code: Veronica, 4, or 5.

The Skull of Mondain in Ultima: Quest of the Avatar. Sure, it clears a screen of enemies, but you get no experience, and it makes your virtues go down the tubes.

The ruby (or red jewel, can't remember the name) from Uninvited. If you pick it up, it curses you so you eventually die in a few dozen turns, and if you saved your game after you picked it up, you're screwed.

The towel from Ghoul School; it's a relatively powerful weapon for about five seconds until you get the Deweytron gun literally three screens later.

Blizzard from G.I. Joe for the NES; not an item, but a completely useless character. The only redeeming quality is that he can shoot through walls, but that doesn't matter when he has the second-weakest gun in the game (Snake Eyes having the weakest, but the fact that he doesn't use ammo more than makes up for it).

Pretty much every weapon in Robin Hood: Prince of Thieves that wasn't the regular or Locksley sword. It's really a shame that you get all the cooler weapons like the Locksley Bow and the ball & chain when there's only about half an hour of gameplay left.

The vast majority of the weapons in Zombies Ate My Neighbors (other than the novelty factor of being able to say "I am currently attacking a sentient purple tentacle with a tomato").

The shovel from Silent Hill 4. Slow, a narrow range, and the kill animation takes approximately forever.

The assault rifle and any weapon you get after it in Silent Hill: 0rigins. By the time you get it, you're already armed to the teeth with melee weapons and more ammo than you know what you do with.

In Silent Hill: Homecoming, any melee weapon that isn't the knife.