Is there an odd bend in the seat stay on the right side or is that just perspective? Looks like the right dropout has an "issue" too. Looks funny as if there's a bend which terminates right below the upper rack/fender eyelet. But, that may just be a photo/lighting artifact too. Looks like the damage is actually to the dropout and not to the chain stay. If that's true, then it's a matter of replacing the dropout and straightening/repairing any damage to the stays and then aligning everything. I suppose if you really like the frame that it might be worth it, but from a $$$ perspective I doubt it. It's a pretty bike, if you avoid looking at a certain spot.