Best use for old server hardware?

Disaster recovery preparedness, move them to an alternative site if possible. Mirror or log ship your sql databases, make another domain controller, print server, etc.

Donate your old equipment to WiderNet, "a service program at the University of Iowa that works to improve digital communication in developing countries."

Testing deployments. When pushing new features out to batches of servers you'll often want to test it first. Having a spare small cluster of servers would be ideal for this.

Old servers are simply a complete waste of energy to run, get rid of them so no ones temped to use them to waste more precious energy and cooling. You may also find virtualisation hypervisor will not support the older hardware as the CPUs and chipsets will not support virtualisation efficiently at all. In my experience, staff are always reluctant to discard working hardware, but they forget moores law relentless march and the costs of simply running less efficient hardware, its a false economy. Theres that sweet spot where its cheaper to decommission a few older systems and purchase one new system with the energy savings.

You can use them for scheduling activities like nightly builds or for storing backups.