The flight instructor reported that, during the landing with the student pilot on the flight controls, about 5 to 10 feet above the ground, a gust of wind caused the airplane to drift to the right. The instructor assumed control of the airplane, attempted to correct, applied full power, and initiated a go-around. The airplane was "low and slow" and the left main landing gear contacted the runway and the airplane drifted left. Concerned the airplane would not gain significant altitude to clear the buildings in the flight path, the instructor elected to land in the grass left of the runway. Subsequently, the airplane encountered soft terrain and nosed over. The airplane sustained substantial damaged to the aft fuselage and rudder. The flight instructor reported that there were no preaccident mechanical failures or malfunctions with the airplane that would have precluded normal operation. About the time of the accident, the automated weather reporting station, located on the airport, reported that the wind was from 170° at 5 knots. The student pilot was landing the airplane on runway 16.