Missed an obvious one
Repurpose as a high end developers desktop.
This is the best option financially in a company where "sane" finance mechanisms are being used. It will not work for various questionable lend/lease/outsource move left pocket to right pocket and pocket the difference quantum economics stuff unless you declare the developers dead for tax reasons.
First of all, you can bring forward server replacement cycle so you stay on the performance edge without depreciating them at a rate which is unsustainable financially.
Second, you get the developers to develop on a machine similar to the one they deploy. As a result performance issues tend to be ironed out in-development instead of in-the-field. This results in a better server utilisation and lower cost. Rinse, repeat.
The costs of doing this amount to the cost of man-hour or so per server recycled and a new case. This is considerably cheaper than refurbishing a server to be a server and cheaper than purchasing new desktops.
The only caveat here is that it works well only if you use linux and do not play silly OEM license games for MSFT software which are specifically designed to ensure that you buy new hardware when you do not really need it.