They're not scanning your books for a dollar. They're letting you pay them to give them books. Then they resell them at some discount. Speculation...but that's what I would do.
The legal key to their business (and to similar businesses such as CD ripping services) is that it is arguably fair use for the owner of a particular copy to make additional copies for his own personal use.
Given that, it is not a copyright violation for a third party (them) to provide a service to help the owner of the copy to make those fair use copies.
It would be a waste of the resources invested in the production of that physical book to not find some productive use for that copy.
A potential compromise, if simply giving out the same PDF is legal, is them offering a big option saying "Our records indicate we have this book on file! Do you want us to immediately send you a PDF copy when we receive your book [potentially discounted pricing or even a percentage of resell profits], or would you like to wait for a scan?" So yeah, now they have to do something with the hard copies, either resell or donate.
Edit: No need to speculate, they claim to shred and recycle everything after processing.