Lots of nice or almost nice horses get in this situation every day. This guy is a filter pre-sale, then there are people that buy them at the sale, then there are people who buy them out of the kill pen, then there are people who buy them at the feedlot and then there are the slaughterhouses.
Think of it like an ecosystem in the ocean. Every balanced system needs the sharks and big fish, then on down to the creatures that live off the whale carcasses etc. that float to the bottom of the ocean. If they didn't exist, the whole system collapses, and it's the same way with the horse industry.
There's room for (and it's important to have) all of these pieces. It's illogical to design systems that only work "if people are better" because 10,000 years of recorded history have shown that people aren't and you can't force them to be. It doesn't work. Best to design systems for how people actually are that work.