I've wondered how collectors feel about this. I don't mind it, and the only way you can tell is on the inner piece where the disc sits normally says "Compact disc" in the top right and bottom left. In generic jewel cases the squares are blank.
Clean jewel cases make your games look amazing! It's like you just ripped the plastic off a new game.
As for the question of broken games, disc based games that are unsavable through buffing I put in a pile for recycling. Cart based games I seperate and hold on to.. not sure what i'm doing with them but out of thousands of games I've had only 5-6 cart games actually go bad.