Distributed Spacecraft Missions (DSMs) have largely garnered interest due to lower cost and new technical capabilities. However, another important attribute in DSMs is the potential of graceful degradation where a failure of one or more spacecraft (or instruments) in the DSM can reduce total performance, but the remaining functional spacecraft can maintain a limited science return. The potential for retaining some mission value in the event of partial failures leads to enhanced lifetime value. Here, an approach is developed to analyze graceful degradation and performance of DSM used for Earth observation. The system performance is defined through metrics of coverage and average revisit time of points of interest. Graceful degradation is quantified through total change and rate of change in performance metrics with increasing sub-system failures over the lifetime of a mission. An Expected Performance measure is formulated for conducting comparison of DSM architectures for early stage conceptual mission design and trade studies.