My dull or broken needles got thrown away as soon as I'd had enough of them for many, many years. About five years ago that changed when I learned about the Japanese celebration of Harikuyo Day. Those who sew gather together to stick old or broken needles in a piece of wax (or covered styrofoam or whatever) and say a prayer for their valiant service. I thought that was so sweet I had to start participating.
Now my dull and broken needles get their own section on the tomato until 8 February rolls around each year. Then I say a few words over them before they are ceremonially wrapped in a tiny bit of paper and - ok, this is where my ability to celebrate ends - then they still get thrown away.
But it's nice to take a few minutes a year to sing the praises of these hard working tools in my studio!