I would feel sad too. Why have they got them in a cage in the playhouse? Can they consider converting the playhouse and adding a run they can get permanent access to or access to via a runaround tunnel, do you think?
Maybe they just don't know alot about bunnies. and they assumed that whats sold in a petshop is suitable pr she was giveb duff advice. i have to say though that despite the many sites available to order rabbit hutches, I found it incredibly difficult to find one that ticks all the boxes. I'm not totally happy with what we have but to find one that's reasonably priced, comes with a cover, looks ok, is a decent size, and has any other criteria you desire eg solid sides as opposed to wire or that u u can move easily etc can be very hard. I'm Sure no cruelty is intended and what's sold should be suitable for rabbits but truth is it isn't and people don't realise the commitment a rabbit is. I'd feel sorry for them too but maybe they don't honestly realise.
We have lots of lovely wild bunnies here and when you watch them run, dig,burrow and live life according to their natural instincts, you can see how some caged buns get a very rough deal...bordering on the cruel. Of all small furries, I think they need the most space and chance to live in natural conditions.
I had a friend who kept hers in way too small cages and wouldn't let them out on the big lawn because 'they pooed everywhere' . Er, yes, that's what they do.