If it only books at 3K, and you pay someone $500-$1000 labor to put in a $1000 junkyard engine(if you can get one for that), you have $2K invested in a $3K vehicle you could have gotten $500 for doing nothing. Then you have no idea of the condition of the junkyard engine. Also, the vehicle still has 15 year old electronics in it, and a 15 year old transmission. Even if the body is immaculate, and the interior is immaculate, it doesn't make economic sense at this point. However, if it's sentimental, all bets are off.
We've gone through this twice in the last few years. The engine in our 2013 Impala broke something internally related to the cam sequencer and spewed metal shavings throughout the engine. Toast! Junkyard engine with 80K miles installed was 2K. We did it because the car was still worth 5-6K at the time.
Then last year kid's 2012 Malibu with a 4 cylinder did a similar thing: the cam sequencer failed, the timing went completely off, it ate 16 out of 24 valves and spewed metal shavings all over the engine. Again, another $2500 bill on a 60K junkyard engine installed with a 12 month unlimited mileage warranty. Car was only worth $5K at the time, but at least we could get $2500 back when we sell it.
It's really a toss up sometimes as to if it's worth it to repair or not. We usually figure if we're gonna take a loss if we sell it after repairs, we sell it now. If we repair it and can get some of our money and/or use out of it, then we repair it.
Current wish list is for '93 Suburban with good body. Don't care about mileage. Looking for good body. We have engines and transmissions for it, but ours has a rotten body. I just like that year because there's nothing on it that I can't repair myself. No complicated/expensive electronics.