Accuracy is the result of everything working together correctly; inaccuracies stack up to create larger errors. If the linear bearings are shot, that can be contributing a lot of the error you're noticing. Some might be backlash, some might be due to tool deflection. If the frame is flexing, that can also cause some of it. You need to go over it one part at a time, fixing things or beefing them up, retesting after each fix to see if you've improved matters (or made them worse). From looking at it, it seems it should be able to hold better tolerances, but you might have to do some work to get there. It's hard to tell what's going on at this point since it seems partially disassembled - that bearing truck on the X axis isn't apparently attached to anything.