Should I provide feedback to a PhD application I have received? I usually reply to e-mails from students asking for PhD positions to let them know if I am interested or if they are competitive / up to standards for continuing with an application but this tends to be more on the admin / funding and suitability to my lab. Yesterday, I received one such PhD application and the project / research proposal was so outside the "state-of-the-art" (effectively the proposal was to research something that already exists as a commercial product) that I think I should also comment on that. 

Should I let the student know and give him some feedback (which is going to be on the harsh side) about his proposal. Is it common or should I not bother at all? To be clear, I have no intention of considering the application.
You will do the student a kindness if you send feedback.  Try not to be harsh.  Perhaps something like, "Did you know that company X already makes product Y that appears to incorporate what you have proposed as research?  That being the case, I'm sorry but your proposal is not suitable for my lab."