Personally I thought Bush did worse in 04 in the first debate than Obama did here. Obama's answers weren't awful; he did what he always does, which is say a lot without saying much at all. It was his demeanor and rebuttals that were bad. Bush on the other hand was almost apologetic about everything, and was completely off. Bush overcompensated in the second debate and was extremely aggressive, but I think he easily defeated Kerry in round 2. I expect Obama to rebound by being particularly engaging with the town hall questioners and win round 2 here.
It's not unusual for sitting presidents to have a bad first debate, and correct for the second. This certainly wasn't
the worst performance ever by a sitting president.