What makes you think these bicycles will be scrapped? I imagine most of them will be sold at auction.
If I've seen half a dozen of them in use that's probably aiming high. Granted, that was in the last half year, when it was winter, but still.
You just see them rot away with broken parts torn off, decaying.
The bikes are of such shitty quality (an expert on bikes estimated a price of $50, max, for the parts) and are so heinously ugly that people wouldn't take them for free. Let alone buy them at auction.
Yes, I imagine that may damage some of the bicycles. It's still much cheaper then alternative means of storage. It's just the cost of dealing with industrial quantities of goods - your local big box stores lose or damage some of their merchandise all the time, for similar reasons.