That's a question that depends on many variables. A major one being suitability.
I would definitely trade a fully broke horse that's not suitable for my discipline for a foal with much more potential to excel in my discipline, due to bloodlines.
I would not trade a fully broke horse for just a foal of unknown breeding though.
And when I say bloodlines, I want something that is almost sure to succeed based on those alone since you won't really know what you have til the foal is older. For example with dressage horses, I would want Sandro Hit, Rosenthal, Stedinger, Quaterback, etc. close up and or some Donnerhall, Donnerwetter, Landgraf or even Ladykiller further back. Those are just some names to me that say "dressage horse".
It depends. But in general I would not do it. I would rather just sell my broke horse for a broke horse. With a broke horse, you know what you are getting. 1000$ wont even get me 2 months of training. Besides, I don't have the time or patience to take a foal from unbroke to finished right now.
When you reach my age (55+) and have talked to enough folks that have been thrown one too many times, you understand that the do anything, go anywhere, seasoned and finished lead mare you've come to take for granted is worth her weight in gold, and I wouldn't trade her for anything in the world. Besides, we've got three mares and can have all the foals we want
I agree that for me, it would depend on the horse and the foal. I wouldn't trade Dobe for a winning lottery ticket, let alone a foal. However, I do have some horses that I would trade for a decent foal (only because I have the space to turn him out and let him grow). If I had to board him somewhere or had limited space, I would keep my old broke monster that I could ride. The $1000 would be a bit of a null point for me LOL.