The horse racing industry, as a whole in the USA, is very corrupt and mismanaged. If you ever go to livestock auctions, you will usually see many OTTBs who wind up there. Yes, it is against the rules at many tracks to send horses to slaughter. Doesn't mean it doesn't happen... #1 there is nobody to enforce that rule and #2, a lot of them will cut up the horse's lip to make the tattoo illegible so the horse can't be traced back to them. I go to a lot of cheap auctions and most of the horses I see there are OTTBs, used up Amish buggy horses, and BYB crap. They all get bought for meat.
Number two, having been to a couple big racing barns, they do not give their horses any turnout. This is extremely bad for their joints and they develop issues such as cribbing, weaving, etc. The horses just don't seem happy there.
Horse racing is the most universally cruel sport. Of course there are people in every discipline who shouldn't own horses, but racing seems to have the most of them. I think that it's due to the large amount of money at stake. It causes a lot of people who don't truly love horses to get into the sport.
Sure there are bad dressage riders, but you aren't going to get rich doing dressage unless you have something worth studding out. The rodeo people do make a bit of money too, but again, not enough to pay for the upkeep of a horse usually, or the purchase price of a horse nice enough to make that money. Nobody really talks about making money in any sport other than racing. The money motivates people to do cruel things sometimes.
Oh, and the horses are definitely backed too early of course. By the time a horse is really old enough to begin strenuous work like racing, most racehorses are retired. A horse's peak physical condition is age 5-7... now how many 7-year-olds do you see racing? A seven year old SHOULD be faster than a 3-year-old but due to all of the stress on those joints, that is not the case with racers.
Plus a lot of older OTTBs have issues. My ottb is 14 and she has TMD in her jaw from not grazing at the track and mild arthritis. And that's from only ten races. A lot of the wrongdoings impact a horse throughout its entire life.
ADD-- here you can get a horse straight off the track for free or dirt cheap. The "nice" ones who have really good movement, are sound, and have stellar temperaments still only sell for around 1000 tops.