Originally Posted by Doug Fattic

I'm a builder and painter and when I've seen this before, it's usually because the tube is rusting from the inside out. So most likely it is not just a cosmetic issue but a serious cancer. That doesn't mean it will die soon and if you ride it, it will break catastrophically and you will die too. What happens is that there is not uniform rusting so the whole tube is thin. Rather after awhile small holes will appear (and maybe they have already) along the worm areas. However it only makes sense to start planing now for its replacement and keep a close eye and any developments. There are options to fix it but not cheaply.

Sometimes when it is painted they haven't used a primer 1st as a base so the paint is not sticking tight to the steel and water gets in there to start the damage. This is more often true with powder coating.