Your console breaks, you send it in, MS sends you back a refurbished one so you don't have to wait for it to be repaired. Yours get repaired and then is sent to someone else who just sent theirs in.
It's a cycle, they're not just stockpiling all the ones that have been sent in forever.
Currently Playing: Saints Row 2 | Battlefield 2 | Company of Heroes
Recently Beaten: Gears of War | Super Mario Galaxy | Darwinia | MGS4 | Sam and Max Ep. 4, Portal | Mirror's Edge | Uncharted | Mass Effect
Looking Forward to: Alan Wake | Splinter Cell : Conviction | The Last Guardian | Batman: Arkham Asylum | SMG2 | Mass Effect 2 |