There's a guy in Portland who does the same thing, apparently puts minimal effort into what he calls a "tune-up" on old low end bikes. He gets flagged all the time.
I dunno. On the one hand, poor people need bikes too. On the other hand, a "tune-up" should be a tune-up, whether it's done by the LBS mechanic or a guy flipping low end bikes on craigslist.
Another factor to consider: It's a violation of craigslist rules for a business to sell there, and some of these sellers get flagged for that reason...