While there is a strong demand for vintage Treks, they don't command the prices of the more collectible high end European frames and the like, and are more usually coveted as "riders", which, in my opinion, is just fine. That's not to say they aren't expensive, because to me a $200 bike is expensive!

You are probably safe repainting it, because in order to have a truly collectible piece, the entire bike would have to be in pristine original condition. I doubt anyone here will flame you for it. However, do you really need to repaint it? Do you plan on riding it? If you do, do you want to damage a new paint job, or is the current paint job passable and less likely to give you anxiety about riding it?

I do have one frame that I think could benefit from a repaint, but not for aesthetic reasons. It's because I think the rust has reached a point where it might compromise the frame. However, before I decide to repaint it, I'd like to ride it for a bit. So, I'm planning on giving it an oxalic acid bath (search the forums for more info on that) and hopefully stabilizing the rust. There is so much, however, that I'm unsure how I'll treat the bare metal that will remain (clear coat nail polish? A cheap clear coat from an autobody shop?)

So, how bad is the paint, really? Does it have lots of bubbling and flaking rust? Or is it merely scratched and chipped, with some superficial rust?

If you really want the respray, for your own satisfaction, I'd say go for it. I don't think the CV police will be knocking down your door. But then, I guess this thread will determine that!

EDIT: By the way, painters like Joe Bell and Spectrum Cycles will respray with Imron, meaning they can likely match your original color. But they ain't cheap!