Traduzione - Tedesco-Portoghese brasiliano - Zu schlecht, es nur macht dich hässlich mit mir!

If the original said 'too bad' (later edited into 'zu schlecht'), shouldn't this be 'que pena' instead of 'muito ruim'?

There is a lot of expressions in portuguese to say the same thing. At my point of view, when I read it - it depends also wich context is the frase, don't you agree? - seemed the best way to say that.
Anyway, "too bad" or 'muito ruim' or 'muito mal' and if you want to make an "enfasis" could be used too (here "ruim" and "mal" could have the same function).
Also your suggestion is a good one - sometimes in the conversation we say "muito mal" as "que pena ..."

I hope my explanation can help you to understand my sugestion of this translation ...
Greetings!
Elimar.