It means "Do Not Buy". A bad ESN simply means the phone is locked or for some other reason you CAN NOT get it activated. Ask the seller for the ESN number, call the carrier of the phone and ask them can they run a check on the esn of that phone and they will tell you why the ESN is bad.
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The ESN is used on certain phones to identify them, especially in those that do not have SIM cards. A bad ESN can indicate a stolen, fake and or phone that was never paid off per the terms of its issuing carrier.
It basically means that the phone is blacklisted (locked) and can't be activated with a wireless carrier for some reason.