If the old bike is valuable, the customer either keeps it as spare, or knows they can get decent money when selling themselves.

An LBS has a reputation to defend and have liability selling a bike. So they need to fix many items and replace worn parts. For most bikes that fixing at LBS rates is close to the value of the bike. Plus the unrealistic expectation of how much that trade- in credit should be.

I don't know commercial real estate. But assume a squarefoot store space cost a few $ each month, you see how a used bike taking space eats your money.

As said above, 90% of bikes are department store bike. I assume another 9% are $500 bikes. So most bikes are cheaper to replace than worth used.

Enthusiasts buy new stuff or very selected used stuff.