You can say that about the horse industry in general though Naz, they are large expensive animals to keep and people are not prepared to shell out the amount it costs to feed and maintain them if something goes wrong. That applies to ALL types of horse not just thoroughbreds. Of the the 60% who don't ever race, about 40% of those are female and are therefore likely to be used as broodmares, so you are actually talking more in the lines fo 4,000 floating horses per annum and they won't be foals when it's decided not to race them they will be 2 year olds at a minimum. They are usually sold through the TB sales and the vast majority go on to either point to point or to be used by the hunting fraternity or for other suitable disciplines and do indeed change hands over the course of their lives, but generally not with the regularity that children's ponies do ( which is the real area for concern if you are interested in horse welfare) as they are frequently outgrown and often in first time owner hands so the potential for neglect is far higher.
Racing is not a perfect sport with regards to it's standards that's true, but it's unfair to paint a picture of uncaring owners, jockies and trainers. Most of these people care passionately about the animals they work with and strive to find suitable homes when it doesn't work out- I know I rehome a lot of thoroughbreds that are ex racing animals having had over 100 go through my little amateur rescue in the last few years, and there are several other industry funded and equipped rescues doing exactly the same thing that I am, so it's really not all doom and gloom. So if anyone wants to buy a thoroughbred ex racer then let me know and put your money where your mouths are:-)