I agree. As a buyer, more than seller, I want to know both the good and the bad. It also helps to know what the seller's needs are - in other words, why the horse isn't suitable for the seller. Maybe not a good potential for jumping, for instance, or just needs to thin the herd. Then, I would want to know why this one made the cut to be sold and not another in the herd.
We recently shopped for a pony - we walked away from an awesome pony where he had recently been shod with a shifty story. We felt there was probably something we weren't being told and walked away from what may have been a perfect pony for us.
The one we ended up buying was hard for the owner to catch, and they didn't 'click.' She was really focused on that, and I felt like there must have been some other reason why he was for sale. However, other than the fact that he has to be kept up on a dry lot, I never figured out what it was. I think I ended up with a great pony. I personally am good at teaching horses to be caught and on our first day home that pony turned into a pocket pony. So far, he's perfect for us, but if she hadn't been totally forthcoming about what she didn't like, I would have assumed that there was something else wrong.