i think its a perfectly good candidate for a beater bike if you are willing to put the elbow grease into it.
i like elbow greasin' so i would do it lol, any excuse for a project....

i would:
spray with paint stripper....
use cheapo kiddie pool the size of frame and do the oxalic acid bath to remove rust....
sand down anything remaining....
then rattlecan it with some rustoleum.