Hey Jeri,
For many folks, these tapes would be less than worthless as you've mentioned.
But, for someone who has the time and gear to properly clean them (or is willing to send them to someone who does, such as the guys at A2DX Labs) they can be saved.
For anyone reading this who isn't familiar with the problems involved with mold on magnetic tape, the reels, boxes/inserts, and the tape will breed spores that can infect other tapes. As Jeri mentioned, playing these tapes will also spread the spores onto the tape machine which can infect other tapes played on this machine. Cleaning them is not for the faint hearted and really requires a room that can be disinfected along with a vacuum with a hepa filter (which collects small enough particles to catch the spores). Also, a proper respirator should be used when cleaning these tapes. There is a post in the "Beginners Guide" which has links to the research done at the U of Texas which stands as a reference on treating moldy tapes.
The bottom line is, I'm sure that these tapes were purchased as a lot without knowing that they were moldy. I believe that this auction is the sellers attempt to retrieve some of what he's invested in them. I have to give him credit though, he could just as easily have not mentioned the mold and sold them for much, much more. Kudos to him.