I know most of the brass we turn in to the two Ammo Supply Points we use gets sold...mostly for scrap.
We only have to turn it in for accountability, in other words so they know we used it and didn't take it home.
A few years ago they took up every bundle of camo netting and the alluminum poles that go with it from our brigade. There was a big parking lot full of pallets with stacks of these things, some still in the plastic bags unopened. There were litterally hundreds of thousands of dollars worth of them. They were transported out to be incinerated and the poles sold for scrap.
I hardly ever doubt the extent of our government's fraud-waist-and abuse.
They do crazy stuff all the time, I've been told on numerous accounts that they couldn't get us the 118LR rounds so we had to hit the range with delinked M240B ammo. When I know there are thousands of the LR rounds in a bunker nearby. I know this for fact because that unit has to get an outside source to do an invitory every so often, and I've done it several times the past few years. For the past several years we have been using .50 BMG ammo for our Barretts that was made in the 40's, and we had a shortage in '07 during one of my Iraq deployments. However, I cannot see what the military stocking up on 5.56, 7.62, .50 BMG, etc has to do with me not being able to get .338 MatchKings. Unless the manufacturers are just not making them and instead focusing on what the gov wants/needs. You never know, it could be for a good reason...like North Korea.