Is it bad English to substitute the word 'says' with 'goes'?
Solution 1:
The OED calls that usage of go colloquial. It's a logical extension of the more correct usage of "go" defined as "produced sound" (i.e. "the firecracker went 'bang'"). This usage goes all the way back to the 16th century.
It's interesting to note that the earlier examples it gives refer to people making vocalizations that are not entirely words, i.e. "‘Yo-yo-yo-yo-yoe,’ went the first boy." So it seems like using "goes" instead of "says" is something that is increasing in common usage, at least in informal situations.