What does an Sprint Iphone 4s with a bad ESN mean?

I guess the person couldnt make the monthly payments so their phone got cancelled. What does an Sprint Iphone 4s with a bad ESN mean? Can it be unlocked/jailbroken so it can be used with T-Mobile, or is it completely useless?

Just what you said. A phone with a bad esn(usually CDMA phones), are phones that has a balance owed on them or they are phones that were reported lost or stolen. You still can have it jailbroke and unlocked.