I'd have no problem riding that, but we'll see what others say. What I'm curious to know is how does one get a dent in that location? I'm imagining a multiple bike crash in a race, maybe a pedal could get through the chainring. Or possibly it could have happened when the frame wasn't built up. Who knows? Have you gone over the rest of the frame with a fine-tooth tricorder? As far as the rust goes, it doesn't seem horrible. Is that the original paint afayk?