Any TB's we rehome from racing, we keep the passports. If they are sold the passports go with. This limits the possibility for a few things:
1) Breeding from the horse. You can look at this two ways... a) the previous owner doesnt want the new owner to get a bit of luck and make some cash and b) if it wasn't good enough on the track, chances are the progeny won't be and it will restrict breeding it.
2) Racing the horse again. Again.. you can look at this a few ways.. the same as above where the previous owner doesnt want the horse to do well and then there is times when a horse is retired due to age, injury, ect... if it doesnt have its passport.. it won't be runnin.
By law here all horses are meant to be accompanied by their passports. I know this isn't done in the US, but unless the horse is competing or breeding, there is little they can do to enforce it. Truth be told, I had Simba passported and registered and at the three shows we went to this year, it wasn't checked once. It takes nothing to get a general passport for a horse, so all of the rehomed TB's can have one... it just won't be the proper weatherbys book they need to compete and breed.
I personally think it's a good thing.... I suppose working with TBs I'm well accustom to seeing horses go to proper sales. If a mare can't get into one of the many breedingstock sales every year it's probably not worth breeding.
A friend of mine recently got her hands on a TB she used to groom.. he ended up being sold a few years ago and globetrotting to sunnier climates. Anyway, when he arrived she was given a "declaration to never race" form that she had to sign before they would give her the passport.
Stop for a minute, open your mind, learn. You may not agree with what I say, I may not agree with what you say but we will both learn something new.