It's back to the old adage of been worth what someone is prepared to pay.
To the buyer it may be a price worth paying to get something he wants. My £2000 fix up budget may be a bit on the light side, so say the finished car owes him £5000, granted, the car will not be worth that, but if he dosn't sell it, he won't realise the loss. He will have a mint, low very low mileage Mk2 in a sought after colour sat in his garage.
We don't all think of our Mk2's in the same way. To some they are a nice car which add some fun to the daily grind, where to others they are just something nice to own and keep for ever.