A horse doesn't have to be papered to be a good horse. Also, nowhere in the ad does he say it's "poorly put together". Maybe it's a gorgeous horse who does throw great unregistered colts. Are you just assuming it's poorly put together because it has no papers?
Also, I think we can agree that there are enough "pretty" and "great" unregistered colts/fillies on the ground right now that need homes without needing to keep a less-than-"perfect" grade horse a stud just so he can make more "pretty babies" that will probably just end up going to slaughter. Because any way you look at it, a mustang is a grade horse and the world if full of those (I own one, actually...a grade horse, not a mustang ).