Obviously the dealer ('family-run business' - aren't they all? Bloke and the missus with a lock-up, then...) knows it's scrap, and punters in the know realise it too. So obviously he's not trying to sell it to the likes of you and me. He's aiming at the shall we say less experienced buyer, who has a dream of restoration with no idea of what it will all really cost (and there are plenty about, witness all the 'unfinished projects' for sale that Gadge is always showing us - and I hold my hand up, I have been one too), riding the current fashion of 'getting into' classic cars.
With such a buyer, if you pitch the car at a very low price, you immediately mark it down as 'worthless'. But if you pitch it fairly high - but not ridiculously so, around the same price as roadworthy running cars - then you can use the sales patter 'it'll be worth thousands when it's all nicely restored', 'restored versions of this are selling at ten times this price' - both of which are broadly true.
A dealer isn't in business to be altruistic and hold the buyer's hand, he's there to shift stock and turn a profit. And this dealer has - apparently - a 100% positive feedback, so presumably his past buyers have gone away happy (even if they didn't stay that way!).