I don't have a problem with people selling problem trees. What I have a problem with is people misrepresenting what they are selling
I was responding to the OP's comment that one of the trees had a hidden failed thread graft - so basically a hole drilled right through the tree. If I were selling the tree I would simply put out a little sign saying "failed thread graft in trunk" and feel like I was giving full disclosure. I think that having a "damaged" tree is very different from having natural material that just has many natural flaws.
To be fair, though, failed thread grafts don't usually wind up destroying that much trunk. It's quite possible the person who put the tree in the auction had no idea the damage was so extensive. If he/she did, then maybe a note should have been added.
I've got some really good trees (well, relatively speaking) for almost nothing at club sales and auctions.
I would never put a tree into an auction if I knew there was a major hidden problem, such as a failing root system, bacterial/fungal infection, etc. If I purchased a tree that had that type of problem, I'd probably talk to the club or the person who originally owned the tree. People shouldn't be doing that. But the tree in question here, I don't know...sometimes when you take a chance on a "deal", it doesn't turn out as you hoped. It's a "deal" for a reason. And as someone mentioned previously, this may turn out for the best anyway, as that tree had a rather poor middle trunk section.