Well, if this is a basement & this is not the "special" sheetrock for a basement, then there isn't anything you can ever do to make it right. Other then rip & tear.
We did my brother's place with an air compressor and automotive sanders. It was very messy but the whole place was done in a couple of hours. Don't forget the goggles and mask.
I am firmly in the camp of take it down, see what the mess is underneath, fix any of that, buy the material, hire a drywall installer, smile when it's done.
My wife has taught me over the years that, sometimes, the best tool for the job is a checkbook or credit card.
I don't really like spending money to 'fix' something, but upgrading is a different story...
Is it insulated, do you need to run more lights or outlets, etc... See in my mind, if I ripped it down and then upgraded some things... well, it would seem as bad, at least to me