I don't think that is shitty at all. The dealer will do a complete check of the car before they put it up for sale usually. They don't want any head aches with customers either, so If there are any issues then they will wholesale it and be done with it. No harm done.
The dealer will do anything it can to make money on our friend here when he walked into the doors to buy his car...he should do the same.
Really the only dishonest thing you can do when trying to trade in a car is trying to pass off a salvage title without them knowing it. Anything else is on them. Believe me they make enough money on trade-ins that if they miss a bad motor here and there it ain't gonna matter.
That's ****ed up, and incorrect. If you trade in a car to me and we miss a compression test, I'm out the money to fix it. Thanks asshole, you just wiped out all the profit I could have made on your deal AND all the profit I could have made on your trade in.