First of all, the premise of the story is weak. The Walnut Grove mercantile is the sole store within at least a 15-mile radius, and anyone within those premises is going to shop there out of sheer necessity. Since the vast majority are farmers, practicality will reign in their consumer habits. Advertising to raise name awareness (as would be Mrs. Oleson's reasoning) could hardly be profitable.
Secondly, Mrs. Oleson would have shelled out far more than any marketing could repay her for the cost of such a horse that she ends up buying Nellie. The likelihood of a woman in this era having control of her finances independently from her husband is also incredible.
The scene of Harriet trying to ride the spirited thoroughbred is comical, but again, requires a lot of imagination to believe that Harriet really could have held on. Likewise, the vastly superior bloodlines in the horse that Mrs. Oleson bestows upon her daughter would have outdone Bunny easily, despite the fact that it had not had a workout in a while. Add to it Bunny's exhausted condition...no way could Bunny have won.
The weirdest part of this episode, though, is that prissy Nellie, whom we've never ever known to have straddled even the gentlest pony, would be allowed and persuaded to mount this huge beast of a horse and gallop two miles across a prairie. That would be wildly dangerous, and how would Harriet and Nels possibly have stood for it? Likewise, Bunny could have collapsed under Laura after being forced to run a second time after his recent sprint.
And poor Bunny...referred to over and over again as "she" when Bunny most definitely was a "he" as we see...since Bunny was a gelding, that could have only added to the horse's confused sexual identity.
There were more credibility issues in this episode, but all in all, it somehow remains a classic - and isn't too painful.