Well, I am coming at this from a completely different perspective.
I have lived in Asia and I am pretty darn convinced that the strike-offs end up at local markets (the place where most people shop). Fabric is often marked with a marker where the error occurred. I have seen where a dye-lot error is marked on the edge and the offending color is circled on the selvage in both Korean and English.
I know that the stall owners often purchases directly from the factory "store." Remember that a lot of quality fabric is manufactured in Korea and Japan. Why would a manufacturer ship it all the way back to the US when there is a viable alternative?
Whether this is done with the blessing of the the likes of Moda, Free Spirit, etc., who knows. But I can say with a fair bit of confidence, that not all strike-offs end up at the likes of WalMart and Jo Anns.