For large raspberry growers here in WA, most berries are mechanically harvested and sent off to be processed into juices, extracts, concentrates, etc. One producer I know ships them over the Cascades in milk tankers. (Faster, fresher, less handling.) They can go from the farm to the factory line in under eight hours.
Berries by the pint, and even IQF (individually-quick frozen) berries command a HUGE premium, and are often hand harvested. You can't take those labor costs downmarket and make the economics work.
>that at smaller scales, composting isn't awful.
And note that in cases like this, having worked on an organic fruit farm, it is often very difficult to actually compost the unused fruit seconds. Very acidic fruit in large quantities does not generally make for a good compost. It requires a lot more work to deal with a mountain of lemons for instance in a compost to get a usable soil composition. Most people don't ever encounter issues like this because a households normal compost is varied enough that you won't have this problem.
A lot of times nothing will grow or you won't get a very good yield out of really acidic soil for the most part.
All this is to say that the fruit in your example is probably literally being put to no purpose whatsoever and is almost assuredly not being composted.
Since we're talking about bad things that can happen with old fruit - one more story where composting is truly awful. There was a lawsuit in these parts a few years ago where several hunters were severely burned after falling through into a pile of decomposing grape mash. Apparently it can reach temperatures in excess of 500° when highly concentrated:
So how do you know they wouldn't just plant more if people paid more?
If the total demand is stable then you'd need less perfect crop and you could actually plant less to sell the same amount at the same price.
As of last year the farm he bought them off no longer bothers to harvest seconds because it’s not worth it to them in the cost of labour to pick, sort and sell them.
So yes in certain cases this fruit is being wasted and people paying more for it would cause less of it to rot.