The damage to that car is nothing. It would be a no-brainer for me. It's still exponentially nicer than my own car. Heck, mine had a bad body, rust, crash damage, missing parts, a completely destroyed interior, bad brakes, bad wheels and tires, bad transmission, and almost nothing worked on it. I'm lucky I even got it home.
It's interesting that many times totally pristine rust-free examples go to wrecking yards because of one small problem (like small crash damage or a bad engine) or get parted out--and then the parts get put on rusty beaters, which is the best some of us can afford.
It seems like every time I've bought used parts for cars I've owned, the cars the parts were coming off of were in much better condition than my own. I would think, "Something is wrong with this picture".
Like JasonP says, "When you are poor, you can't afford to make good financial decisions." It would be great to find a nice example that looks showroom new and has no problems with it, but a lot of us can't afford it. So we buy beaters and make do. I once bought a W116 that had already been parted out and stripped of many parts (including the wire harness). But I pieced it back together and used it as a daily driver. I was still into it less than $1,000 by the time it was all done.