That's not true at all in some cases it's actually the other way around entry level xeons are failed i5/7's that can't turbo boost as high.
There were only a few xeons that were made into desktop processors and they ended up as i3's there were a few of those that supported ECC.
The 'E' edition CPU's can potentially be xeons but then they aren't failed ones but highly cherry picked ones as they boot and overclock very high.
Re:How Intel Makes a Chip
by colejohnson66 on Sunday June 12, 2016 @05:49PM
(#11890438)
Citation for the binned Xeons resulting in i3 to i7?
A lot of Intel's chips are recycled binned Xeons. They've almost completely stopped making desktop processors.
The I7s you buy are usually failed Xeon chips. To my knowledge Intel currently only fabs laptop and server chips.
[0] - https://en.wikipedia.org/wiki/Product_binning