I don't know but I don't think anyone is required to make a bike "like new" before reselling it. The guy was adding some value to the bike by making it moderately rideable. If all he did was clean it up with a hose-down and take care of any serious/gross issues that required some minor adjustments so that nothing rubbed or the derailleur adjustments were set so that the chain didn't fly off the edge of the freewheel.

Even just pumping up the tires and adjusting the cables adds value -or moving the bike from an area that nobody wants it to the next city or neighborhood with lots of bike-buying hipsters. He might not be adding as much value as you or I do by doing a total refurb on a bike but he's adding value and most likely the market will agree with him as the resale value of the bike he spent 20 minutes on will sell for more than the "nothing" he got it for.

It's a free world, as long as the guy doesn't tell the next owner that the bike is in "perfect" or like-new condition then they are getting a little bit of something for the money they are paying over what the guy picked the bike up for. Live and let live. Just because the guy doesn't have the same values and limits that you do when flipping a bike doesn't mean it is wrong. Let the buyer decide how much he wants to pay for a used bike and in what condition.