No you are correct in thinking that cgi is crap, because it is. The big studio's use it because it's cheaper and anymore they are churning out these plot-less spectacles faster then they did in the grind house era. Practical is better in just about every way....
That being said, I'm not so sure about this one. You've got the sfx guy writing the thing, which is never a good sign. Also it looks like a tentacle monster, which is the lamest kind of monster. To do small tentacles you take surgical tubing, roll it around in some latex to make it look organic, add a bit of slime, and then run some compressed air through the whole thing to make em wiggle. I could rig some up for under 20 dollars. Of course the budget for the film is just 350k, so maybe that's all they can afford.
Eh... I'll probably pitch in a few bucks anyway. I'm scared practical might go the way of stop motion if we aren't careful.