Count my vote as "keep looking." Not that I really have a vote. Like one of the others said, "It's your wallet, bro" not mine. My thought is, if your budget is about $1k, and that's what used MIA Strats are getting, wait around a bit for what you want rather than spending $700 + another $300 to get it there. I'm with Mark in saying that, unless you have a good relationship with the store so that they'll throw you a bone, they're probably not going to fix the issues on a used axe. They probably did all the work they wanted to do on that one before they put a price tag on it and hung it on the wall.
I, also, wouldn't completely count out the MIM Strats. Yes, I think the MIAs are nicer instruments, but the MIM ones are some killer machines. I've got 5 Strats ranging from a MIM Standard Strat up to an American Design Experience (now called the Mod Shop). The nicest one is easily the ADE Strat. I built it to be what I wanted...somewhere between the American Standard and the American Deluxe. The MIM Strats are pretty nice though. I've got a MIM 50s Classic Series that's no slouch. But the one that I play the most? It's my MIA Hwy1. Entry level American made Strat. It just feels and sounds right. Did I mention that it's bottom of the line MIA? So, don't let the fact that it costs more bias you that it's a better instrument. It probably is (you get what you pay for most of the time), but it may not be.
Two more opinionated comments, and I'll leave you alone. First, if you do buy it, check it good. Strats are modular enough that parts are very easily swapped out. If they were swapping out pups in it, just be sure that they didn't stick a MIA neck on a MII body and pass it off as a MIA. Not saying the store did that, but who knows what the original owner may've done to it before they got rid of it. Also, in my not so humble opinion, Strats are SSS. If you have yourself one that is SSH, then I'm sure it's a fine guitar with an S-type body, but it ain't really a Strat.
Disclaimer: Everything above is just my opinion. And you know what they say about opinions. So YMMV...in fact, it probably does. If you get the guitar, enjoy the heck out of it. If you don't, don't fret it because you'll find one soon enough.