No, its not that bad at all. Don't let hearsay guide your choices. Look into the information yourself and make your choice. I've heard that Ross has a bad USMLE pass rate, but this site says different:
http://www.iaomc.org/ross.pdf
#77 - Ross USMLE Step 1 pass rate of 86.6% in 2004
Of course, that has to be taken with a grain of salt too. Since it is 3 years old. Also, the website that lists it and the organization itself might not be valid.
One thing is for sure, they weed out the weak ones in the beginning and keep weeding them out throughout their medical school curriculum. So long as you study hard, I don't see a problem with it. Ask the school though, call them up and ask them about their pass rate.
Of course this does not apply to all the Caribbean schools. Stick with the top 4 is what I've been told - SGU, Ross, AUC, and Saba. St. Matthews might be an option. See which states recognize the degrees from those schools.
I am personally doing a lot of research on Ross. It doesn't seem that bad. If you can study your butt off for 16 months of your life, you're on your way to an MD. Its owned by DeVry University, so you know they are legit. They are renovating there and from the pictures, they have plasma screens hanging from the ceilings in the lecture halls with a wireless campus. The cadavers are 1 per 9 students, but I've seen that ratio at some DO schools.
The best part about it might be the tuition. $11,000/year. Thats dirt cheap compared to some US schools - $30,000. If you get the same rotation site as a US med student and graudate with 1/3 - 1/2 less debt, then why not? That means you can pay off your student loan quicker.
It doesn't have to be all doom and gloom. I've heard of people working along with doctors in the US fine during residency. So long as you know your stuff, then it doesn't really matter where you get your degree.
This is the most important part though. You are already behind the 8 ball. You will have to BUST YOUR BUTT to succeed if you decide the Caribbean. But of course, you'd have to bust your butt anywhere to succeed...