A lot of it depends what's happening to that Xeon machine if you don't buy it. If it's otherwise going to the landfill then you using it a little longer to defer the creation of brand new hardware is absolutely the greener option.

Same logic that applies to driving an older car— it may not be the most efficient, but especially if you're low usage, extending the life of something that already exists is almost certainly greener than using something new.

Yes, you'd hope so - but unfortunately that's not true. We're terrible at pricing externalities (by design, it makes it easier to profit; for example free use of public commons like fjords for farming salmon - creating ecological disasters).