My friend was going to throw this away so I stepped in to try to save it. But is it too far gone?

It looks like scale, a hard shelled version of mealybugs and much harder to get rid of. Get out some rubbing alcohol and Q-tips and be prepared to spend a couple hours everyday until no more show up.

If you have other house plants, keep them far far away from this plant.

Thank you, @Lucy68. Wasn't sure if it was scale or MB. Appreciate your advice.

Lucy68 said: It looks like scale, a hard shelled version of mealybugs and much harder to get rid of. Get out some rubbing alcohol and Q-tips and be prepared to spend a couple hours everyday until no more show up.

If you have other house plants, keep them far far away from this plant.

Lucy has given good advice. You kind of have to physically remove them one by one. I use a toothbrush, but whatever tool you like is fine.

The good news is they are no longer mobile at that point, so they won't crawl back. Alcohol tends not to kill the sedentary adults because of their hard outer layer (until you remove them), but it does work better on the juveniles, the life stage where the bugs are still mobile. 70% alcohol in a fine spray is good for this purpose.

Also consider using a systemic insecticide (you water it into the soil, then it is taken up by the plant) as a preventive measure to help reduce reinfestation.

Scale bugs are a recurring problem with this cactus in my experience (the crested form, not the normal one). If you want to keep it, you have to be vigilant and act early to make them go away. Also be aware that susceptibility can be reduced with good care (including lots of light, water in moderation).