If this type of job is one of your core business, turning it down would be extremely rare. Many of us have stories of a client that started out just like this and now brings in several brand new trucks and trailers every year.
It is your business and it's always ok to say no in my mind but your job probably wouldn't have been one of them. I would have pitched a full wrap or at least a larger graphic to cover all the missing paint $$. I would have charged extra for any adhesive removal as well. They would have been told that this could have been avoided if we had done the removal, even though I hate removals. The client would have been informed that the texture of the missing paint will show through the wrap, but a full wrap will look more professional in the long run. I see our job as educating the client and improving their image. If they aren't a jerk, cheapskate, or no chance of success, and I can improve their image, I don't' see any reason turn them down.
I have raised prices on certain customers to try and encourage them to go elsewhere and even fired a few. Those clients deserved it because of all the time they wasted, but realize the higher your prices the greater the expectations.
In any scenario, part of the sales process is discussing options and building realistic expectations upfront so your customer can make informed decisions. But in the end, it's their decision, but you get to decide what you put in your portfolio or on social media.