From what I can see, that's not sludge at all. Sludge is a goopy, sticky, gel-like substance that builds up in the head and can circulate through the oil system. I don't see that at all. All I see is darkening of engine components by used engine oil over time and carbon deposits. That's normal. Though, this engine wasn't maintained as well as it could have been. You can tell the original owner went a little longer without changing the oil, or didn't change it as regularly as he/she should have.
My 1990 5SFE with over 200k miles was way darker than that, but still ran quite strong. I mean, literally, the camshafts were black from the amount of blow-by and other contaminants in the oil, but no sludge or sludge build up.