Beets have a fungus

Roasting caramelizes the natural sugars in vegetables and, eventually, burns them. Roasted anything that turns out bitter is almost always the symptom of overcooking. Sometimes it also means that your ingredients were spoiled or "off" in the first place.

As for saving them - there's not much you can do in either case, other than trying to mask it with some other flavours. Beetroot pairs well with cranberry and other tart fruits, which would probably mask the bitter taste; cream, sweetened yogurt or sour cream would also be a good bet. Otherwise, I can't really think of anything else to do with them; overcooked food usually ends up in the trash for me.

Generally, raw beetroot shouldn't become soft. The thing is that there are differing definitions of soft. If it is soft like a tomato is, then it has probably spoiled. If, on the other hand, it is still firm but has little "give" to it, then it's probably alright to eat.

It is the cooking that softens it up, though it can be eaten raw. I grate some raw beetroot into salads and stuff occasionaly, just for fun.

I'm not sure what to say about the smell thing. I think that raw beetroot generally smells a little earthy, especially if you haven't peeled it yet. The very distinct beetroot smell is usually released by cooking.

Obviously this is all a bit vague, as we can't send smells over the net yet.