In my very personal opinion, I'd maybe shell out $1000-2000 for that truck. I'm the guy who's always going to promote foolhardy decisions to buy trucks that need LOTS of work, that's just the thing with this one - it needs LOTS of work. Go into it with open eyes. I personally don't care so much about the body, I'm a perfectionist with regard to mechanicals but don't mind if they look rough. I don't need a showroom-condition new paint job just because I saw some rust bubbles, but that frame needs attention badly for safety reasons. See the Trail Tailor c-channel insert linked above.
And like @3_puppies says, the spot that would be my personal dealbreaker is the forward attachment point of the rear leaf springs, on the inside face of the frame. Once the heavy rust starts there, the frame can develop holes right where huge load bearing forces from the rear leaf springs interact with the frame. Bad bad bad if there are holes starting there.