i'm not saying a masters is a waste of time. heck, it's the route i took--i graduate with a masters tomorrow! but from a practical point of view in regards to admissions, how close your app gets scrutinized in the early stages of admissions and how a grad GPA factors in really depends on the particular school. and the fact is, the grad GPA is not factored in with the undergrad GPA, and med schools often use the undergrad GPA as the initial comparison method between applicants. yes, at some schools, a masters will be looked at favorably, but there is a lot of objectivity to the initial stages of admissions and the extent to which a masters is considered, or even noticed, really differs. there simply may not be a person closely examining every single app in the early stages of admissions; some schools get nearly 10000 applications and there is simply no way for every app to be read thoroughly. your grad GPA will not cancel out a low undergrad GPA--there is no way around this, unfortunately, except to take more undergrad courses. grad grades are generally considered to be inflated anyway, because it is hard to fail, and that is probably part of the reason why grad GPAs are kept separate from undergrad.
there are several of us on this board who went the grad school route to improve our apps. too bad the search function is out right now--kutastha has one of the most inspiring stories on this board. basically, he's applied three times, always with awesome MCAT scores, first out of undergrad, then with a masters, and now finally on the tail end of a PhD, and has finally been accepted. a doctorate is pretty damn impressive if you ask me, but the weird thing about admissions is that it's primarily based on undergrad stats so it's as if the graduate accomplishments mattered less. your grad GPA is like icing on the cake, like impressive ECs--but again, their effect will be minimal if your undergrad GPA and MCAT scores aren't already up to snuff.
it makes no sense, i know, but it's the way this process seems to work. i don't regret for a minute pursuing a masters, because at least i can walk away with something tangible--but there are definite drawbacks to taking this route to improve your app to med school.