Many if not most of the houses are beyond renovtion. A fair amount probably have fire damage (arson in Detroit is legendary). Sitting for years with broken windows, holes in the roof, etc. leaves them rotted shells
The idea would be to bulldoze them and then just sit on the land until you need it for some reason. Carrying costs are obviously much lower that way you can't vandalize a lot (although you can dump on it of course..)
From what I remember, this is exactly what Detroit is trying to avoid. They have these auctions with the expectation that they will be lived in either by the owner or a lessee.