Since the method of incineration can produce toxic byproducts, the incinerator must be very 'clean'. Kodak does incinerate many items, but AFAIK, they no longer incinerate scrap film. That is all I can speak to.
Yes, it does sound like a horrible process and as our products generally have only about 5% cover with silver ink about 8 microns thick, I find it hard to believe that it is worth doing. The reclamation company must consider it worthwhile though or they wouldn't bother collecting it.