It depends. What kills the batteries is fast charging or discharging and to an extent, leaving them sitting around fully charged or discharged. If the batteries are retired to do grid storage (or home storage), I would expect the charge and discharge rates to be fairly sedate, and charge levels to be managed so as not to have the battery level too low or too high for very long. I can easily imagine the batteries lasting a long time under such conditions.
Space and weight are also much less of a concern. A stationary infrastructure battery with less than half its original capacity wouldn't be unusable the way it would be for a car.
Industrial carbon capture coal electricity production is substantially more expensive than renewables or natgas at this point, no reason to turn to it.
And at that point it'll cheaper to "mine" those batteries for their cobalt, nickel and lithium than it will be to pull it out of the ground. At that point recycling will be viable because they'll have a large amount of fairly homogeneous batteries to recycle rather than the random hodge-podge of tiny batteries they have to deal with now.