Sounds okay to me. It might be a little boomy, but that could very well be due to mic placement and not the guitar. Looks like the mic is pointed towards the sound hole; maybe too much.
I've heard low end acoustic guitars sound good. The key has more to do with mic placement and the player than the instrument. Granted, if the instrument sounds like crap to your ears, it's going to sound like crap to the mic. If you played the guitar and you like the way it sounds, you should be able to capture a good recording with the right mic and proper technique. The trick to a good capture is mic placement, so experiment a lot until you find a position that works. The most common starting point is around the 12th fret and angled towards the sound hole a lot, a little, some, not at all.