Can't speak for every listing on here, but depending on the state and type of auction there can be lots of issues that you have to be aware of, like physical issues with the property itself, liens on the property, and even potentially people occupying the property who may have defaulted through things like not paying their property tax, but not yet left after the state has technically 'seized' it.

Where do you live? You can buy reasonably crappy houses all over the USA in rural areas for $5K, $10K all day.

Well, HUD wants to sell it to someone who intends to live in it, "owner occupied", and most of them are garbage. Some from the pictures are almost certainly condemned/require significant repair before it could be considered safe for occupancy. So you need someone willing to invest the time and money a flipper or real estate investor would, to live in a really cruddy house.

In short, the people who have the money to fix it want to live somewhere nicer.