IMHO, Scotty's mirroring the predominant logic of contemporary capitalism, in offering such advice: Caveat Emptor. The onus is on the buyer, and woe to them if they do not exercise due diligence.

It's consistent, in some form, with contemporary neoliberalism: Individuals assume more and more risk. Scotty is more than willing to help individuals accurately gauge risk, but the onus is on the individual to act on what's been articulated.

After listening to Scotty over some time, as far as his worldview is concerned, there's a bit of tension between his legitimate outrage at poor corporate behavior (and failure to make quality products or inform consumers of actual and potential risks) and a more laissez-faire approach regarding the responsibilities of individuals. It would take some detailed textual  analysis of his videos to validate the hypothesis, but it is my initial (tentative) interpretation of the implicit worldview Scotty has constructed 

It's an ethical dilemma I've thought about but really have not had to face. The next owner of my vehicles has always been the scrapyard and they know what they're getting.

You would have to drop the price low enough for someone to buy it. Anything can sell at the right price. If the person buying the vehicle knows the problem I don't see a problem. Knowing the condition of the vehicle you should not purchase if you can't fix it , or have it fixed at a reasonable price. 

Yes, interesting ethical dilemma.  Every car (except classics/collectibles) eventually has a problem that costs more to fix than the car is worth.  Dumping it on an unsuspecting buyer (hello, Craigslist!) seems unethical, and selling it to a “suspecting” (ie, informed) buyer is unlikely.  In such a scenario, junking it seems like the only ethical solution, but means taking a big hit for your honesty.

however, there are other ways out:

1. trading it in: the buyer takes the hit, but gets a sale out of the deal, and presumably has the expertise to know how to inspect a car.
2. sell it to someone who has the tools and expertise to fix it for less, therefore making it more valuable to them than to you (also makes for good content for Discovery Channel and YouTube [Gas Monkey, Wheeler Dealers, ChrisFix and Vise Grip Garage have inspired countless shade tree mechanics]).
3. disclose the heck out of it and sell it to someone who really wants that model of car and is willing to overpay. Obviously this is more viable for a sports car or 4x4 than a generic sedan or minivan (unless the buyer is a vanlifer or something).
4. part it out

But, yeah, disposing of a car that is past its useful life is hard to do if you still want to sleep at night.

Depends on the problem, and the buyer's skills/resources. One man's problem might be another man's treasure.

If fixing the problem is worth more than the complete vehicle, then a recycler can part it out.