[Microsoft] “testified that a free restore CD was worth the same price as a new Windows operating system with a license. … This was false and inaccurate testimony provided by Microsoft in an attempt to set a precedent that will scare away future recyclers and refurbishers from reusing computers without first paying Microsoft again for another license. … Anyone successfully extending the life cycle of computers or diverting these computers from landfills for reuse in society is essentially standing in the way of Microsoft’s profits.”

It's actually worse today since the license is tied to the CPU id, so it's not really easy to transfer it to another machine.