I was recently reading the NBDA's (national bike dealer association) newsletter and there was a story about a shop owner that buys the broken bikes off of wal mart for pennies on the dollar. He then fixes them up and resells them as used bikes. His take is that he can tell people who call and ask "we have used bikes that start at 75.00". Of course when they hit the shop he's generally able to upsell them. But some folks just don't want to pay more for a bike, so at least they are getting a safe ride.
The bikes would be hitting the landfill otherwise, so at least he's able to "recycle" them...