Actually, a more likely reason than the mob (although that is a true reason) is that these operations needed a 'base' to haul their games back to either to service them, or for doing game rotations (changing games regularly makes you a LOT more money, or at least it did), or to bring in new ones, or whatever. Machines you brought back from rotations that might have been earning poorly or were broken (or both) could be tossed to the side so that when a machine that was working and earning broke, you could salvage the old stuff for parts and keep your new machines running.

Selling them to take the cash would be a huge headache, and might result in maybe like $100 per machine or something like that. Chances were, if you didn't sell it to knowledgable people, they would be calling you to come because a switch doesn't work or a monitor went out, and pain in the butt for sure, and definitely not worth the maybe $100 you could make off the machine.

If you took working machines off route, you could toss them aside for the time that (hopefully) you get more route locations, so you don't have to go buy 10 brand new machines, and could instead use maybe 9 of the machines you've already paid off to see how the location is going to do.

The only place that it really made any sense to sell machines was at auctions, as it was the only way to guarantee that the new buyer wouldn't come back and bug you about the machine they bought, but auction prices were so low on most of this stuff that it cost as much in labor to bring the games out as it did to sell them, so why bother? Besides, in a year, you might be able to use that machine for parts to keep another alive, or...

About 15 years ago the market for classic video games really sort of exploded, and ops that didn't convert all of their old cabs to Street Fighter IIs and TMNTs found that they could sell in poor condition Ms Pac-Mans, Galagas and Tempests for nearly a grand, so suddenly those started coming out, and so did a bunch of not-quite-as-high stuff that people might be interested in. That market tanked when MAME became so popular, and has only recently started to recover. The pinball market picked up steam about the time that the classic vid market started tanking, and has been continuing ever since.

There are still some warehouses out there, and some of them are in use still by route companies to do their thing. I've been in a couple in Milwaukee, and even found a great EM that I made a deal for in one of them a few years ago