There's no "special" rack problem inherent to Demios . Like any other car in SL it will need repairs once in while. My Demio has clocked 80,000km upto now and replaced rack ends at 65k.
Compared to similar aged cars , I think it has fared better.
I don't see a problem in resale value because you buy low and then sell low. Margin will be same as vitz. Sometimes, you will be able to make a nice profit as well.
Unlike earlier days there are lot of options around 2.5 - 3 milllion category , you get indian brand new vehicles , korean & malayasian counterparts , used japanease ones like vitz and also much new ones such as nissan leaf .
So better to get a car that you suits you needs and that you will enojy. If you drive a demio for 2 -3 weeks I don't think you will be looking at a Vitz again.