Basically the only thing that could be "used" is the PCB inside? Something that doesn't suffer wear and tear at all?
The PCB does, actually, suffer from wear and tear. They are usually poorly built and have very low tolerance to moisture, corrosion and heat. So the longer you use it, the more likely it is that something will become corroded and will fail. This is the most likely cause of failure in electronic devices like phones and computers unless you actually physically get it damaged by dropping it. This happens on its own, no matter how careful you are, since air always contains some moisture. Refurbished PCBs often don't have the protective layer against moisture as they have had chips replaced on them, which makes them even more susceptible to corrosion.
Ask any electronics owner whose device failed one day for no apparent reason. That's all due to something becoming corroded on the PCB. Also, the way there are built, they are only designed to last just about the amount of time you're expected to use them, which to Apple seems like a year or two. So if you get a 2 year old refurbished PCB in your device, it will probably fail much sooner than a new one would, since it's already 2 years old and is about to fail. And usually these failures are due to moisture naturally present in the air, which Apple's warranty does not cover if the water indicators have changed color, which they probably have unless you live in the Sahara desert.
Sure, the device you're getting fixed wasn't new to begin with, and that's the very reason it failed. So replacing it with another used device will just continue a cycle of failures. If your car's tires are worn, you should replace them with new ones, not old ones. Same goes for brake pads, oil, and every single other part on a car. Replacing failed parts with used parts is asking for more premature failures. These cheaply made electronic devices are not designed to last, so gambling with used, refurbished components is silly.
The only valid reason I can think of is the lessened environmental impact, maybe there's a benefit there. But otherwise, it's just saving tiny amount of money that don't seem to get passed onto the consumer.
Here's a video explaining this: