Whenever AMD has a defective processor, what they do with it is determined by how bad the problem is. Faulty core in a quad core? Lock the broken core and sell it as a triple-core (why Intel doesn't even make triple cores like AMD). Two cores broken in quad core? Lock them both and sell as dual core. If something else is faulty within the processor, though, they usually will also melt it down and re-use the materials.
This is actually a good thing, because it means you can mass produce high quality processors and lock down defective cores rather than operating two different assembly lines for different products. It keeps prices down for consumers, it wastes less material, and it means that if you buy a three core processor there's a chance you can unlock it and get a fully working core - it's hit or miss though. I'm not really qualified to make any kind of statement on quality, but if Intel does not do this as well, then part of the premium you pay on their processors is them passing on the extra cost of operating extra assembly lines.
I doubt anybody recycles the wafers, they're grown from crystals and sand isn't exactly expensive enough to validate recycling it. I've seen manufactures just throw out wafers before (I have two 12" sitting in my basement as I speak), and I'd estimate that these things probably cost anywhere between 200 and 1000 dollars apiece. Manufacturers can test if a processor is defective or not before it even gets cut off the wafer.
I agree with Nick, taking a creation that didn't work out and rebranding it is a quality-less trick that, from a consumer perspective, isn't cool.
As I mentioned before, it's actually in your favor. It's not like they're lying to you, it's a perfectly functioning 3 core processor that passed quality assurance, it's just got an extra bit of useless silicon attached to it.
EDIT:
Computers in general are based on powers of 2.
1, 2, 4, 8, 16, 32, 64, 128, 256, 512, 1024, 2048, 4096, 8192, etc.
There's really no such thing as an actual tri-core, with literally ONLY three physical cores. That's why we have single cores, dual cores, quad cores but no "real" triple cores.
I doubt there is a technical reason that tri-core processors are less common than the rest, it's probably just more cost effective to resell quad core processors with a core deactivated. Also, as an example of a real triple core processor, the Xenon processor used in the Xbox 360 actually physically has 3 cores on the die.
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