Horses are huge animals and often have to be put down for injuries to their legs. It's a shame to let meat go to waste. I don't know about killing horses in their prime though if that's what they do.
Animals that have to be euthenised for one reason or another cannot, and nor should they enter the food chain for humans, cats, dog, or otherwise. Firstly, there are the drugs they use to humanely put down the patient which would be toxic to down stream consumers of the meat products, and secondly there maybe concerns about zoonosis.
No, the problem is that there are other drugs that might have been administered therapeutically, so animals that are in the food chain have to be managed differently than ones that are for companionship or racing. For example Bute is commonly used in horses, but is toxic for humans.
This in part was why the horse meat scandle was such a problem in the UK.
No, OP said that it would be a waste to not use the meat from such animals. To the child of that person's comment, there is a presumption that a non-poisonous method was used such as hammer or bolt-gun.
If the horse has to be euthanized, unless it happens far from vet care (say on a distant trail ride), it's going to be given a lethal dose of sedative. If it does happen far from care, then it'll be most likely shot in the head and the carcass burned or left for predators if it's not possible to dig a pit for it.
Source: live on a horse farm and have had to deal with weak or dead horses.