Of course, the cheapness of a movie is not the end-all, be-all, which is why I said that I will withhold judgment. Dario Argento's movies are a good example, because they often look pretty hokey for various reasons, but he maintains an effective mood despite all that.
As for Dawn specifically, I don't know that I agree, though. Sure it looks bad in relation to modern films, but it looks about on par with average movies of the time (some of Carpenters earlier movies also look pretty cheap by today's standards), and people understand that when they watch it, and don't judge a movie for not meeting modern standards. Even the makeup wasn't unreasonably bad for that period. It didn't look like a work of art, but it looked pretty good then, and looks "real" enough now that people can get into it.