We only hired the inspector after we were pretty sure that we would put in a bid and that it would be accepted. We knew no one else had placed a big recently, and the house had been on the market for a while. We gave a pretty low bid, and they didn't accept it, but they did counter offer.
The inspector's report makes it easier to bid though. We listed all the major things wrong with the house and wrote a letter explaining that these were the reasons we were bidding so low. Around here, it's about 300 to get the inspection, so it's worth it when you can then bid down the house by 10K.
Given the amount of problems it has now, bid for a LOT less. You might even find a contractor to come out and give you an estimate for repairs so that you have an idea for how much less.
Honestly, I wouldn't have them fix it. They have no reason to do a quality job, and you're the one who will be stuck with the results. Either have them discount the price greatly and do it yourself, or walk away. I know it's hard to walk away from a good place, but patience pays off in this game. If you really are willing to walk, they might drop the price by a lot. Good luck!