I purchased such a vehicle in 1994: a 1990 Nissan Sentra with 22,000 miles. I drove it for 6 years, sold it to a friend. He drove it for 3 years, at which point it needed some work. He sold it to a guy who fixes up cars. He replaced the clutch and rebuilt the transmission. It's still going, now it has over 100,000 on the clock.
The vehicle was sold to me by a dealer who explained the rebuilt title and the type of flood damage.
I see no problem with selling these flooded cars as long as the buyer is aware of what he is getting.
Bargains for those who can rebuild and clean them.