The market dictates value. If that home had any value, someone (like you or me) would have bought it and flipped it. That certainly wasn't just a "sugar coat" house. I've turned a few turds into diamonds. From the description and looks of that place. The best you'd get from that turd would be coal. -- ...because I care.
From reading the entire thread it appears to me that a reasonable price was never set. Either there was no motivation to sell or perhaps the estate was never properly settled and no one had authority. The city appears to have a policy of tearing down as many as they can. Google it. I sincerely doubt that someone like you or me ever really had the option.
I've turned a few turds into diamonds. From the description and looks of that place. The best you'd get from that turd would be coal.
I've seen houses in worse condition go for over 100k around here in the Seattle area, in auctions. On the other side of the Cascades anywhere between 10k - 100k, depending on location. If someone can do drywall, fixing up a home like this is not that expensive. -- Wacky Races 2012!