I'm in contract on a $400K house upstate NY - was prepared to spend $50K on cosmetic changes (painting,  new floors, new kitchen, new bathrooms etc) but after getting the inspection report today here's all the issues I'm dealing with and it's not pretty (see below) How should I move forward?

Its global, the big dogs overseas are going to cook you in your own kitchen.

My contractor was supposed to do a full gut renovation (bathroom, kitchen, floors, everything!).

And be sure to smell behind cabinets-especially kitchen cabinets that don't go all the way to the ceiling (cats sit on cabinets and pee right there), bottom of doors (urine drips down door and runs across the unpainted bottom, it gets absorbed and still smells), any heat/ac vents on the floor or low on the walls (looks like a litter box to cats), thresholds (pee at the door and the pee runs between all the cracks) behind toe strips, baseboards, etc.)

Just for the kitchen it would take at least 10k...

I see a few fridges in the front and a kitchen in the back.

The after-repair value (ARV) of the property is estimated at $260K, which could net a profit of $15-17K after selling expenses.At the sale price of 260K, the property meets the one percent rule and features a brick exterior, new roof, 2 new bathrooms, and 1 new kitchen. 

Purchased under market value, rehabbed Kitchen, Bathrooms, Interior finishes (flooring, paint, windows) and Landscaping.

@Brandon Malone the only reason to consider a tenant proposed upgrade is if you were planning to do it at some point anyway (and I am saying consider, not necessarily approve)This isn't something I would do unless of course it is a high end property and there is essentially a chefs kitchen where the expectation would be a gas range.

Provided utilities, roof, bathrooms, kitchen, etc are operable?