If you have to write the post then clearly that is your answer. From the information given it sounds like this is absolutely a human made issue and not the horses issue. If you're not willing to change things for his sake then suggest they sell him and someone who is a better home can come along.
I worked at a barn when the horses were in anytime it was cold, windy, cloudy, 1% chance of rain, etc. In the winter they were in for weeks on end, then would get a few hours turnout in triple layered blankets then back in (almost worse then just leaving them in?) It was borderline abuse. Riding those horses was like taking Cerberus for a walk. The part that made me ANGRY was that is wasn't their fault at all. Luckily no one was hurt during my time there but it was seriously a ticking time bomb. Plus the horse who was explosive anyways (but super sweet luckily) would LITERALLY explode about 3 times a minute. I've been in the same situation at other barns just not as extreme.
It is by FAR in this horses best interest to rehome him. If you do want to purchase him I would move him asap and start ulcer treatment as well as keeping him on a preventative long term. This isn't about whether this is the right match for you this is about the horses well being.
I am in New England. I understand winter weather, I also know keeping them in 24/7 is wrong. Winter DOES mean more indoor time in many climates, it's not an excuse to lock them in a tiny pen and leave them there. I understand that this is how your barn does things and you don't get a say in it, but it also offers a very obvious explanation for this horses behavior, he is literally being driven insane.
I would pass, it doesn't sound like the right match (again, that you're even asking this) and it sure sounds like the horse needs to be in a very different situation for his wellbeing. If you do decide to go through, please follow through with what is best for him he's very clearly trying to tell you something. You'll have a different horse if you do and will likely do even better showing.