Sure its a cheap car on the surface but we have to understand that it was written off for more than just the owner saying "i dont want it back it got wet" if it was economic to repair and was easily repairable then the insurer would have insisted this were the course of action to take wouldnt they?
The part I think you're missing Adam is not the cost of repair, but all of the associated costs with damage like this - a replacement car whilst this is in for (possibly lengthy) repairs would be a fortune. I've heard of hire cars like Lambos and Bentleys costing £30k per month through insurance channels. Just one month of this makes the car a total loss based on Loz's £47k valuation. That's why damaged cars can be a real bargain these days, the damage is the smallest part of the bill.