Frank, I can't quite see enough of the critical surfaces. The important parts are the tapered sides of the groove, which is where the peg rides; and the bearing races on the ends. The damage to the outside diameter, and the bottom of the grooves, is irrelevant.
But from what I can see, mine looks worse than yours does, where it counts. I've got some other used ones, but they have bad shafts, and I decided to try the one I had rather than experiment with how to move the worm from shaft to shaft. Seemed to work out very well, except I had some residual looseness on-center. The tight spot that you are supposed to look for when adjusting the top cover has turned into two tight spots on my worm, due to wear in the center.
I don't know of any effective way to repair an existing worm. Maybe, with enough tools and setup, you could manage to regrind the groove after building it up with weld, and then harden it again, but it sure wouldn't be easy to duplicate the shape of the original groove (which is kind of important).