It seams SMART disks are a great idea that nobody knows about. When disk drive electronics started using microcontrollers, it became possible for disks to monitor their own performance. The disk drive industry got together and came up with a series of measurements, along with a standard way of retrieving the results, and gave it a clever name. It is possible for a Windows program to monitor the disk drive and warn you before it fails.
Norton Utilities had such a scheme. It could even intentionally mark specific sectors bad. But NU pretty much died when Symantec took it over because they didn’t keep up the tools.
You can see the contents of your SMART disk drive registers with Everest.
This utility also shows a bunch of other cool information about your computer that you can mostly live without. You can see some more information about SMART here:
If you’re using a computer, the internal disk drive is most likely a SMART drive. I imagine external drives are also SMART drives, but I don’t know whether the utility can get to the registers.
I guess the reason SMART never became popular because disks got more reliable and because it comes down to buying a new hard drive, as ichirorabbitt already suggested.
You can try FDISK / format. Or if the error occurs when reading a specific file, you can try renaming the file to something like “bad.spot”, then marking it invisible, read-only, system, immovable, immutable, ... Then you will have a smaller disk, but Windows won’t use the bad spot.