How is it bad?
The dude probably has a small ass dick. She is probably a chick who needs decent sex. There are men who can't go without sex and jerkin it doesn't cut it and they spend all their disposable income on hookers. Similar females are out there but obviously they don't buy male prostitutes.
One of my best friend's girlfriend had a fuck buddy who was also a friend of mine (big college the kids weren't friends.) I guess my buddy just sucked in the sack maybe his dick was small who knows. I didn't blow up any spots or anything but I felt like a huge dick being at the bar with said fuck buddy and going back with the two of them and her roommate one night (my friend who was with her had graduated the year before.) Especially since they stayed together a couple years after college and all. But this girl wasn't a horrible person or anything shes a nice girl she just needed to be boned. Luckily they didn't get married and my boy has a hotter gf now than her. Being a bitch about that situation and told or whatever wouldn't have done anyone any favors.
If you turn her down she'll have to probably go down her list of other dudes she knows to get what she needs (the bf is probably all up her ass and she prob knows she can't meet new dudes to get railed I am guessing she has limited options and you're the best one.)
You should tell her she is using you and shit though and ask for gas money etc etc. I had 2 girls who were never GFs but wanted absolutely nothing to do with me other than sex back in the day. It was a little weird and shit.