Good points for walking away all around, I shall follow your advice. But first, one final question. Say I made him a ridiculous and reasonable (given the state of the frame) offer, how low would that be? 5 bucks? 10 bucks? I realize passing = 0 bucks but sometimes when a super low number is presented things may change slightly. I am aware this sounds like I'm talking myself into the buy but fear not I will pass. This is just for curiosity sake like say maybe stripping down the paint to see how it was built .
Also wondering why, if you think this could be saved, why it would not be worth saving? Would it be because you could never get the structural integrity back or would it be purely a cost thing? Yes the bike you posted is this model. They offer it as the Bridgestone RNC7 up until a year or so and they seem to go for hefty prices on auctions. I have never heard of hydroformed steel outside of this. The end result is quite pretty imo.

Here is a youtube vid showing their reverse ish butting at 1:52 and hydroforming. I guess they keep the internal width the same while contouring the external section. I dont speak Japanese but I think that might be a 1.7kg frame (1:09)?