I think that to some extent you are right about trade offs...but you don't have to buy a boat that needs everything re-done. I think that finding the boat you want in excellent condition and ready to go is unlikely in an older boat, BUT...you can get close if you have time and patience. Example...you may see two Catalina 36's on line for 120K and 140K respectively. The 120K one may need 50K to bring it up to snuff while the $140K model may only need $10K. The mass of used boats on the market makes it unlikely that the well fitted out boat can realize its true value in relation to the others on the market...so you get a bargain IF you can find that particular boat or wait for the owner who originally hoped for $170k to lower it into the right price range since no one will look at it at $170K.
Finally...many boats are in decent enough shape to start living on and sailing a bit on and improving as you can afford to. What you decide to do is up to you and the choices are not as bleak as you make them sound but you don't get something for nothing and those that think they can often get more than they bargained for!