Salvage title cars are a relatively common way to save a few $$$ where I'm from. Insurance companies are writing off cars that really have pretty much minimal damage due to the fact that labor costs are so ridiculously high these days. Here we're allowed to do our own repairs. It does have to get inspected before it can be licensed again, but the inspectors are fair. If you do the work right, no problem. If it's unsafe, well, then you don't get to drive it until it's right. That said, it's not a major issue since so many of the salvage title cars just need a few body panels, a couple suspension parts and a paint job.
Why do cars get totalled so easily? Well, in today's world everyone wants everything *perfect* and won't deal with even the slightest paint mismatch. That requires a full pull paint job. I got a full paint quote from a shop for my small 2 seater car last year (after 22 years the paint is fading some, go figure) :-). Estimate is $6,000-8,000! The actual painting and supplies was only $500-1000. The remainder of that was all the labor of disassembly/reassembly! If you do that yourself and just have them paint the parts... :-)