In terms of business value, I would think it's extremely rare that a real case can be made for a rewrite due solely to the internal state of the code. If the product's customer-facing and is currently live and bringing in money (i.e. is not a mothballed or unreleased product), then consider that:
- You already have customers using it. They're familiar with it, and might have built some of their own assets around it. (Other systems that interface to it; products based on it; processes they'd have to change; staff they'd maybe have to retrain). All of this costs the customer money.
- Re-writing it might cost less in the long term than making difficult changes and fixes. But you can't quantify that yet, unless your app is no more complex than Hello World. And a re-write means a re-test and a redeploy, and probably an upgrade path for your customers.
- Who says the re-write will be any better? Can you honestly say your firm is writing sparkly code now? Have the practices that turned the original code to spaghetti been corrected? (Even if the main culprit was a single developer, where were his peers and management, ensuring quality through reviews, testing, etc.?)
In terms of technical reasons, I'd suggest it could be time for a major rewrite if the original has some technical dependencies that have become problematic. e.g. a third party dependency that's now out of support, etc.
In general though, I think the most sensible move is to refactor piece by piece (very small pieces if it's really that bad), and improve the internal architecture incrementally rather than in one big drop.
