So, here are the facts:

1. I am a novice cyclist hoping to try some multi-day tours this summer and then possibly longer tours in the future.
2. I hope to build the bike as a multi-purpose bike for rail trail riding, kid hauling, rain riding, and touring - so I don't want a very expensive frame.
3. I have nearly all the parts I need for a decent touring rig (racks, panniers, etc), save the frame.
4. I found a 21" Trek 750 locally for $25, which has a seattube of 53.5 cm, and a slight rise in the top tube (maybe an inch).
5. I have a 35" PBH and my ideal traditional frame size is about 58-60 cm.
6. My ideal top tube length is about 58-60 cm.
7. The top tube on the Trek 750 is 56 cm, but I have a 120mm adjustable stem to help lengthen it a bit.
8. I've finished a couple bike projects recently, and I'm really sick of spending money.

For those who have used smallish, non-dedicated frames for touring (such as hybrids or MTBs), but have since graduated to dedicated touring frames in your size: is it worth it for me to suck it up and spend some money on a larger frame? In the long run, will I be happier and more comfortable? Or can I make this frame work?

I've been looking for a used touring frame for a while, but they are either too rich for my blood, or they have some "problem" (such as cantis for 27" rims, narrow stay spacing limiting tire width, etc.). I figure I'd rather spend $250-$300 on a Nashbar frameset (price includes missing parts and frame prep).

I know this question is like beating a dead horse twice. I apologize for that. But I'm just one very indecisive SOB.

Here's the frame in question: