Surely the kink in the steel must affect the structural integrity of the bike?
Well, yes, the steel has been stressed beyond plastic deformation to have a permanent kink (and it is in two places, looking at the pics -- under the top
and down tubes). The big things to consider are:
a) Has it changed the geometry of the bike by any significant degree (i.e. increased the head tube angle).
b) Are there any cracks or stress risers resulting from the blow/kink in the tubes.
c) If a) and/or b) above, are the problems significant within the intended use and/or weight/strength of the rider.
This is a fillet-brazed frame, so there is no lug edge to complicate matters, and the kink is within the butted sections of the tubes.
I have cut up for examination a large number of high-quality frames discarded by local shops for this very reason (and similar damage). In my tests, the frames were still remarkably strong even in the affected area, but showed microscopic signs of damage beyond the obvious blips (yes, I did look, and dyed the areas after removing the paint and magna-fluxed them as well) and there was evidence of damage, mostly in "stretch marks" and some microporous surface cracks. Tubes are frequently cold-worked after forming for framebuilding purposes (i.e. s-bend stays), but always gradually and within the working parameters of the tube. Accidents involve a lot of sudden force, and often cause damage that careful and deliberate cold-working does not. A major source of my tubing stock for framebuilding projects was acquired from such sources. The tubes tend to bend near the head tube 'cos that area is in the heat-affected zone and has been partially annealed (softened) by higher temperatures during brazing or welding. Cut off the damaged portion of the butt, and there is usually plenty of "good" steel left over for fillet-brazing (i.e. my Folder on-the-cheap project, which is a mixture of new and "recycled" tubing).
I guess what I am saying is one would want to look this over carefully and look in particular for signs of stressed/distressed paint in the area. It wouldn't hurt to rub a little white talcum powder on the black paint to highlight any cracks, but the seller understandably might not be agreeable. It is possible the owner/seller has been told it is not a problem by SJS Cycles where they are familiar with the bike. Might be a good idea to ask the seller if SJSC seen it and what their thoughts are. The seller's candor is commendable.
Me? I'd want to look at the fork crown as well and also to see if the steerer rotates without binding in the headset.
A bargain is a bargain unless it isn't.
Hope this helps!
Best,
Dan.