It's not so easy to give things away at scale. If someone deposited 500 kilograms of assorted meat products outside your front door right now, with a note attached saying they need to be consumed or frozen in the next 24 hours or they'll go bad, how much work would it take for you to deal with that?
Clothing is of course a bit easier to deal with (it'll still grow mildew if you don't protect it from moisture!), but the source link explicitly anticipates there will be some circumstances where it's impossible to give away clothing and authorizes destruction in that case.
Is that scenario supposed to be relevant?
This isn't some random guy. Their entire job is dealing with the logistics of big piles of clothes, and they have months in advance to plan.
There just aren't that many people in developed countries who can make use of a pallet of unsellable clothing. Even free clothing distributors - which most organizations accepting clothing donations are not, by the way - generally strive to provide a broad selection of desirable clothing rather than a bunch of copies of an unpopular shirt.
What makes you think these are unsellable? Would you be happy if the law mandated a certain amount of time offering deep discounts and only then could allow shredding? Because I bet the vast majority of these clothes would sell just fine at 75% off, brand new.
I'd be much happier with a law like that, yes. Clearance racks and outlet stores are already a well-known practice, so it seems like a minimal distortion to require that all clothing product lines have to cycle through them before being destroyed or recycled. My experience with clearance racks, though, is that people ~never buy something they're not excited about just because the discount is high. They browse to see if they get lucky on something they might have bought anyway, and if they don't they go buy something else at full price.