Welcome to the Police. They don't serve and protect you and I, only people and businesses with big money.

Don't forget themselves, they protect themselves the most.

Some states require that anything of value seized by the police has to be sold at public auction. I think the spirit is that it has to be made available to the public to avoid the state simply taking it for themselves, fwiw.

But the state did take it for themselves, and now they're selling it back. That's not "made available", that's fencing.

Yet, destroying all the items is worse. What other options does one have? I mean, yes there is a perverse incentive, but that's more for cash forfeiture without a crime, which is a real thing too in the US..

Generally auctions are considered the least-unfair way of disposing of property. Outside of forfeiture or lost property, in some causes a court can force shared-ownership property to be auctioned, to give it a "fresh start" without the problematic shared ownership. This also happens with hundreds-of-millions-of-dollar real estate.