I agree with the others.
The age old saying says "One mans trash is another mans treasure"
We donate a lot of stuff too but if it is useable we throw it out.
We have a few really nice thrift stores here. Last time we were there we found something we really needed that others may just throw out. It was the bottom to a Tupperware bowl we use. Ours at home was cracked and we couldn't use it anymore to hold liquid. It still held solid stuff pretty well but liquid would leak out of it. We were thrilled to find it.
I know artist will buy cracked vases or pitches to use the glass or clay from it.
I don't understand selling bleached, stained or torn clothes but like someone else said using them for dog beds or liners in crates would work.
I do agree with you though because I have gone to some that are pretty much just selling junk. My mother in law takes all of her daughter in laws (including me) on a long weekend trip. We stop at every thrift store, Good will, yard sale & other sales along the way. A few stops were pretty much useless. We saw broken board games, puzzles with just a few pieces in it, books falling apart and clothes that looked like they were worn by paints. The second we got out we passed around hand cleaners. lol
As for the rule "because of their status that basically they have to accept everything and put it out and not throw it out and they have to put it on the sales floor." -
I'm really surprised to read that. But I was thinking this may be a rule set by the area that collects the donations. Such as a church, Good Will or a school funded sale. This may have to do with a tax law & being a non profit organization.
People do throw things out. We live in a college town and a few times my husband has taken things to the dump he comes back with things that look almost like new. Last time he found a large cases of brand new books. They are real estate books & getting out of debt books. All like new. Some even made a noise when you open it showing it was never even opened. lol Those are going in my eBay store as soon as I have time. ; )