Repair paperless drywall or tear out and install new?
As long as some of the drywall paper is still there, the drywall is still intact enough and it's safe to skim coat it. Either approach will work. Only you can answer the question of which one is "worth it." Among the factors:


Which of the jobs you can do yourself
Which of the jobs you enjoy more/hate less
The relative money costs of the two jobs, whether you do them yourself or decide to hire them out
The relative time costs of the two jobs
The amount of mess and inconvenience of the two jobs
Whether or not there's anything behind that drywall you wanted to expose/replace anyway


Etc.