But here we see that with the action set reasonably at the 12th fret, the strings are a full 1/8" lower at the saddle than they should be. This string should be much higher from the top of the guitar. It should be at least 28/64ths if you look at the right side of the ruler.

You can also see that the saddle has been filed down so far that the back edge is actually recessed into the slot in the bridge wood. The general rule of thumb is that there should be "around" 1/8" of saddle above the wood of the bridge (8/64ths relative to the ruler in the picture). That's about exactly how much saddle is missing, to give the correct action at the 12th fret, if the neck angle of the guitar was still in spec.