Short Answer: 1. You can challenge and may not get anywhere 2. perhaps you can do it yourself and save time and ensure systems are up and running. 3. Risk it and have a limited inspection done w/o utilities.
Read the link I've attached below. I am in the business, I have been buying and flipping homes for over 30 years, I have never bought a foreclosed property for myself and while I've helped may buyers purchase foreclosures (always against my advice) I can count on one finger then number of times the buyer actually got a great deal.
If you and other buyers want foreclosures to be an above average deal then it's time to let the banks who have decided to take someone's home away to choke on them for a good long while. This is the only way their going to learn to think long and hard before foreclosing and when they do foreclose they'll be much less arrogant than they presently are about the value of their properties.