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Yes, it's exploitative. But this isn't a question about being reasonable or "fun". It's a question about how a set of rules applies. (If you prefer, treat it as a hypothetical to elucidate the interactions between various damage types.)

Suppose you have a Nature Oracle, which can freely change its type between Plant, Animal, and Humanoid. As such, it is a legal target for the Awaken spell (provided it can get to low enough Int). The question is how ability damage should be treated. Warning: This is going to get complicated.

Example:
1) Oracle reaches level 20 and changes into a Plant.
2) Oracle sustains ability damage (not drain) down to 2 Int

QUESTION THE FIRST
Can the Oracle be the subject of an Awaken spell?

If not, assume instead the Oracle was subject to ability drain instead.

QUESTION THE SECOND
Can the Oracle be the subject of an Awaken spell?

Assuming yes, the plot thickens as follows:

3) Oracle becomes the subject of a Maximized Awaken, replacing all mental abilities with 18s. So far, so good. But then,

4) Oracle changes type to Animal
5) Oracle is subjected to 16 points of Int drain
6) Oracle is again hit with a vanilla Awaken

QUESTION THE THIRD
What are the Oracle's ability scores? I presume they're now 3d6 Int, 18 Wis, and 18 + 1d3 Cha.

Assuming the answer to Q3 is as stated (and please correct me if I'm wrong),

7) Oracle changes type to Humanoid
8) Oracle is touched by an Atavistic Splinter, gaining the Bestial type and sustaining 2 Int/Cha damage per day for n days.
9) Eventually, the Oracle's Int reaches 1-2 again (and the ability damage becomes permanent)
10) For good measure, the Oracle is hit by 2 points of Wis damage and 1 point of Cha drain as well. The Oracle also makes the foolish decision to wear a cursed ring granting -2 Wis (Overall: 3d6-2*n Int [Permanent], 18-2-2 Wis [Temporary, as well as a permanent "enhancement" type damage keyed to an item], 18 - 2*n + 1d3 Cha - 1 [Permanent, with -1 Drain])
11) Oracle again transforms into a plant, and is again hit with a Maximized Awaken.

Whew.

QUESTION THE FOURTH
What are the Oracle's ability scores?

A) 18 Int, 16 Wis, 18 Cha (i.e., the permanent damage, temporary damage, and drain are all healed fully, and accounting for the fact that the Oracle is still wearing that cursed ring)

B) 18 Int, 14 Wis, 18 Cha (i.e., the permanent damage and drain are healed fully, but the temporary damage must be healed)

C) 18 Int (carrying a hidden -2*n penalty), 16 Wis (carrying a hidden, healable -2 penalty along with the cursed ring which takes another 2 off the adjusted base score of 18), and 18 Cha (carrying a hidden -2*n - 1 penalty), and thus subject to subsequent ability restoration that can bring the scores to 18+2*n Int, 20 Wis, and 19+2*n Cha (22 Wis if the Oracle removes the ring)

D) 18 Int (carrying a hidden -2*n penalty), 18 Wis (carrying a hidden -2 penalty), and 18 Cha (carrying a hidden -2*n - 1 penalty), and thus subject to subsequent ability restoration that can bring the scores to 18+2*n, 20, and 19+2*n

E) Another possibility I haven't thought of?

As you can see, I'm having a lot of trouble tracking which kinds of damage/drain/"permanent" effects get tracked in which way, and how/when other effects overwrite them. Guidance is appreciated.

The problem with any cute trick to make money is that Pathfinder is not an economic simulation game. The market is handwaved so that the players don't have to deal with realistic mechanics of a market. But if a player starts playing with economics, then I am willing to start houseruling the game to make the markets more realistic. The local market for those particular spells would quickly become flooded and no-one would buy the Blessed Books anymore. So the wizard would have to start shipping the books to foreign countries, etc. increasing the costs.

Ah, but the local market wouldn't get flooded because the simulacra only produce one book every 2 weeks. This isn't on the same level as producing 1 million iron daggers and dumping them on the market all at once. Any town is already going to have a robust supply of books and scrolls, and adding a few per year won't muck with the supply enough to change the equilibrium price. Moreover, the "shipment" isn't a problem at all - you can order a simulacrum to travel to any known town. Imagine a franchise, with a small number of local simulacra shopkeepers!

Inventing a money-making scheme for the sake of theorycrafting with the system without actually exploiting it is good, clean fun. However, I am curious about a few details. First, would the wizard and his simulacrum know enough spells to fill a 1000-page Blessed Book without repeating spells? Each spell takes up a number of pages equal to its level, so if the simulacrum uses 3rd-level spells for maximum profit, that would be 333 spells. Second, does the cost of the simulacrum matter? Creating a simulacrum costs 100 gp per hit point. For a 6th-level simulacrum with Con 10 would have around 24 hit points, so that is 2400 gp. Okay, that is minor compared to the cost to make a Blessed Book. Third, why bother with the simulacrum? The wizard could make and fill Blessed Books himself.

The books probably wouldn't be completely filled, at least not to start, but you can recover the price of the books 100% even if they're blank, since they both cost and sell for 50% of their market value. Every spell you add means increasing the rate of money creation, and that means every gp you get should be funneled into buying more scrolls or renting other wizards' books, if possible.

The simulacra are reusable and relatively low cost, so no problems there. The reason you bother with the simulacrum isn't that you can't do it yourself (indeed, doing it yourself is probably how you get the scheme off the ground without setting back your adventuring too much) - the advantage is that you can run this economic activity on autopilot while you do the adventuring. Even at low rates, passive income is passive income. That means more focus on roleplay (and less time spent roping clerics into your blood money scheme), and you can afford to give the more item-dependent characters priority on loot.

Out of curiosity I was trying to determine your math and I'm not sure where your numbers are coming from.

If I assume 10 normal spellbooks and assume that they contain nothing but 4th level spells. Each spellbook is worth 4,000gp. ((4^2)x10)x(100/4).

Following this same approach
10x level 4 only = 40,000gp
10x level 3 only = 30,000gp
10x level 2 only = 20,000gp
10x level 1 only = 10,000gp

However, we can only sell it for half this and a blessed book costs 6250 to create. So profits are as follows:

10x level 4 only = 20,000gp - 6,250 = 13,750
10x level 3 only = 15,000gp - 6,250 = 8,750
10x level 2 only = 10,000gp - 6,250 = 3,750
10x level 1 only = 5,000gp - 6,250 = -1,250

If you sell books that are a mix of 1st - 4th then each one will on average make a profit of 6,250.

If you sell books that are a mix of 2nd - 4th (since 1st makes you lose money) then each will on average make a profit of 8,750.

Since it takes you 7 days to create a blessed book. Then you will make 1,250gp per day.

So, first, you don't need to lose the cost of the Book when you sell it. Think of it this way: an empty Book will sell for 50% of its book value (heh, puns). If you add 1 cantrip to it, you haven't reduced its value at all - it's still got 999 perfectly usable pages! If you sold 10x level 1 only books, you'd have 5000 gp, which is exactly the lower bound I cited in the original post.

Moreover, you're not producing a Book every week. It takes 2 weeks, since item creation takes time equal to market value divided by 1000. MV is 12500, not 6250.

The real limiting factor is the number of spells you know. And that is a real limitation: 20 level 5 spells is still only 100 pages worth of material! But every spell in a book also represents pure profit, so the trick relies heavily on re-investing those profits toward building out the book you're actually using for adventuring. But as a wizard, you should probably be learning new spells as you can afford anyway, because you're supposed to be a bit of a swiss army knife. Either way, what's wrong with producing a profit of 1k gp per day? Free is free, and passive is passive.

WIZARD: You killed my shopkeeper and robbed my store!

PC #1: Wait, I recognize you. You are the shopkeeper. Someone resurrected you.
PC #2: We killed you once, we can kill you again.
WIZARD: That was my 8th-level simulacrum. Guess how powerful I am!

Feel free to use this in one of your games. It would be a memorable encounter, to be sure.

I'm sure everyone knows the cheesy Blood Money and Wall of Iron/Fabricate exploits. Unfortunately, these require some measure of cooperation from other characters and the GM. Here's another trick I came up with which seems a bit...less cheesy.

The only things you need are 1) the Simulacrum spell, and 2) the ability to create Blessed Books.

1) Create a Simulacrum, imitating yourself. It will be at half your level, and will have half your skills and feats. Endow it with Create Wondrous Item and Spellcraft.
2) Order the simulacrum to create a Blessed Book, which takes 13 days at 1000 gp/day.
3) Order the simulacrum to copy your spellbook into the Blessed Book, using Scrivener's Chant (a cantrip) as necessary to speed up the process. This will create a reference Book.
4) Order the Simulacrum to loop steps 2-3, thereby generating half the value of your known spells.

This generates between 5 and 405 gp profit per spell, or 5-45 gp/min. Since the Book can hold 1000 pages (= 1000 minutes of writing), this produces a profit between 5000 and 45000 gp per full book, limited by the number and power of spells you know. This can be scaled up to any number of simulacra. The downside, of course, is that a 7th-level spell is required, but it's a perfectly passive income once you get it started, and requires only the initial capital outlay of a single Book and simulacrum.