Is it wrong not to cite a bad quality paper when the literature on the topic is scarce? Should I cite a paper that I deem of bad quality just because it is among the only two papers that use the same methodology I'm using in my research?

I'm writing a paper that uses a relatively new computational tool. There are ONLY two studies that use the same tool in similar research contexts. One did it superbly (Paper A). The other didn’t (Paper B). I have to make the reader aware I am not the first using this software in my field, but the scope of my paper is clearly defined and does not include delivering opinions on the other two papers (both papers are in my same field, but their research questions are so different to mine that, on behalf of directness, there is no point in discussing their results and wasting precious space in an already dense paper). In other words, a plain sentence of the sort “Software X has been use in rocket science before (Cite A; Cite B)” must do. But I feel a little uncomfortable for not differentiating between the disparate quality of the papers, perhaps sounding like I am endorsing Paper B at the same degree I am endorsing Paper A, and implying that readers should view both as having equally meaningful information. As a clarification, I do not see any wrongdoing by the authors of Paper B; it is just a flawed paper that made it into a top journal.

Is it ethical to skip citing a paper that I consider of bad quality? To what extent does citing means endorsement if no further evaluation of the cited paper is included? 

Consider that the problem is more nuanced that it might seem. If the software was of customary use, no citation would be needed, but these two papers and mine are the only studies using the software, and I want to make the reader aware I am not a crank for trying this approach.
To which extent citing means endorsement if no furher evaluation of the cited paper is included?


None at all.

By citing the paper as using the software, you are acknowledging that the paper exists, and that it used the software, and that is the only thing you are doing. Citation is not a sign of approval or agreement or endorsement; it is merely acknowledgement of existence and relevance.  Citations are not statements about the quality of any result, either positive or negative.  If you want to state an opinion about the quality of a result, either positive or negative, you must actually state your opinion in the text, using English words.

I suggest initially citing both papers, and then giving more details about how paper A used the software to derive interesting results, and then remaining conspicuously silent about paper B.