"Arguing that a copy of Windows is essentially useless without a product key, and that all of the recycled machines had their own valid keys.."
Some might argue a copy of windows is essentially useless even with a product key.
But on a serious note, i have burned copies of Windows 7 OEM DVDs for people before when i have fixed their PCs that only came with a 'recovery partition' to reinstall the OS. Which is useless if the hard drive is knackard. Without the COA and product key the disc is essentially a coaster.