As David T. points out earlier in the thread, Palin was not a "disaster" and did not really hurt McCain during the actual election campaign - this was only seen in retrospect when elements within the failed McCain campaign (mostly Wallace and Schmidt going by Game Change) blamed her for McCain's loss (and not his stopping his campaign during the financial crisis, which really doomed it). Most press accounts at the time credited Palin with turning out votes for McCain and hyping the Republican base in ways McCain himself did not (McCain's biggest convention bump was after her acceptance speech), and, again all press accounts at the time also had her holding her own with Biden, a seasoned politician with lots of experience, in their one debate.
As for Romney, to pick someone "worse" than Palin, you would have to pick someone who would cost him net numbers of votes (which it is not clear Palin did for McCain). You would need someone who is not only polarizing/loathed by the left, but who have zero hype from the right. I can see Jeb Bush (given the Bush name was not a positive in 2012) or maybe even Rudy Giuliani, who often comes as abrasive and sometimes says whatever comes to him at the moment (so not well loved by the left, but also a pro-choice social liberal who would not consolidate doubters on the right of Romney's own conservatism). Another option would be Romney picking the man McCain WANTED to pick in 08 - Joe Lieberman. Lieberman was persona non grata for the Democrats by this time but also as a social liberal (and Al Gore's running mate) would have garnered zero enthusiasm (the opposite in fact) from Republicans - although Romney (like McCain) might have thought there would be enough Independents to make up the difference.A Republican ticket of two Northeastern moderates would probably do worse than Romney did picking Ryan.