How do I tell potential game designers their ideas are bad?
As a game designer, I know I want the truth from people I show the game to. 

I also know that most people just don't give critical feedback. By "critical," I mean a skilled judgment or analysis, as in "critical thinking." I've been involved in enough creative endeavors to know that most think only as far as, "I liked that," or, "That sucked." I've shown short films to an audience, watched them laugh uproariously, and then say, "It was OK," when asked if they liked it. So I've learned to take feedback for what it is, and not to hang too much of my own self-worth on it. I don't know if your game designers have grown the requisite thick skin or not. 

But this combination of factors makes me able to give you advice about giving feedback - good or bad. I know it seems easier to say, "That was fun!" but both kinds of feedback should follow the same rules.

When someone asks you to test a game, if you don't want to put the effort in to provide decent feedback, just politely decline.

If you decide to accept, you now have a responsibility to think about the game and what you like and don't like about it. Instead of just a blanket, "This rocks!" or, "That was awful," you owe the designer the courtesy of considering the question, "Why?" And then you can give the designer the answer to that question. 

For instance, I have an RPG in playtest right now, and something like, "I felt like it was too hard to succeed - even things my character was good at seemed out of reach," is good feedback. It gives me something to look at, or even questions to ask the playtester. And I would rather have critical negative feedback than thoughtless positive feedback.