The Collaborative International Dictionary of English v.0.48:

Worm-eaten \Worm"-eat`en\, a.
   1. Eaten, or eaten into, by a worm or by worms; as,
      worm-eaten timber.
      [1913 Webster]

            Concave as a covered goblet, or a worm-eaten nut.
                                                  --Shak.
      [1913 Webster]

   2. Worn-out; old; worthless. [R.] --Sir W. Raleigh.
      [1913 Webster] -- Worm"-eat`en*ness, n. [R.] --Dr. John
      Smith.
      [1913 Webster]

WordNet (r) 3.0 (2006):

worm-eaten
    adj 1: infested with or damaged (as if eaten) by worms [syn:
           vermiculate, worm-eaten, wormy]