I really don't think this has anything to do with them not advertising, as the cars are desirable and people love them.
They are selling CPO cars despite their awful mess of a buying process because the Model S is such a wonderful car. However, for every sale, I bet there are many like me and you, who are completely disappointed with how awfully they treat CPO customers that they decide to put off buying a CPO altogether until they sell cars in a more reasonable way.
Even with the current process, people find decent cars but like you we are not comfortable committing to a car without knowing the car is in decent shape.
There is a better option. All they have to do is match the service, helpfulness, and quality you would receive at any used car dealer selling cars in this price range. Who would have thought that how a customer is treated at a typical used car dealer is the experience that Tesla should strive to match? Sadly that would be a tremendous improvement compared to how awfully they current currently treat customers.
I bet if they spend $1,000 - $3,000 per car to fix up cosmetic issues, list the cars at a reasonable price with a quality standard, they'll have a much more efficient CPO operation. Cars that have so much excess damage that they are not viable for refurbishing can then be auctioned.
This whole notion of selling $60,000 used cars "as is" like how second hand furniture is sold at a flea market is probably not the best idea they've come up with... Except at a flea market you at least get to personally inspect what it is that you are buying before you pay!