When you blow a head gasket does that mean that your engine is in bad shape and is going to need replaced too?

Not necessarily. The answer depends on what's making the head gasket fail. 9 times out of 10, it's overheating. Overheating "blows" a head by warping either the head (most common) or the deck it mounts to. So you'd have to correct that -- a good machine shop can do it. The real culprit is what's making your engine overheat. If you can't find/fix that, you'll find yourself replacing the engine, because you'll keep on blowing head gaskets. If you can find the cause of the overheating, there's no need to worry about your engine. It's fine.