Yes they are sent to meat. Most are sent to auctions but ultimately that's where a lot end up if the are not bought.
NAERIC has a PMU program ( http://www.naeric.org/ ). All PMU horses here have to get microchipped. When you get the chip you get a certificate to prove that your horse is a PMU foal which comes in handy when you go and compete. In selected horse shows (you can add on specific show locations if the are not part of the NAERIC program) you win double the prize money if you won riding a PMU horse.