My biggest concern with regifting is not for the people receiving the gifts but for the people who originally gave them in the first place.  I know how much thought and effort I put into the gifts I give.  And I also know that giving gifts can be a financial sacrifice for givers, as it is in my case.  However, I do it out of love.  That said, if I knew that the gift I gave someone was subsequently labeled "junk" and given away to get something "better," I definitely think my feelings would be hurt and I would think twice before giving them something in the future.  I think sometimes regifting focuses more on the material side of giving than on the relational side, and that's why I usually avoid doing it.  Does that mean that I sometimes end up with a pile of stuff I don't really want?  Yes.  But I'm okay with that because I think there's more to gift giving and receiving than getting stuff I want.

On a side note, that's also why I usually only take gift items back to the store if I already have the same item or if the giver has given me permission to return it for something else.  I never want Aunt Suzie to come over and ask where the rice cooker she gave me is and have to explain to her that I exchanged it for a DVD instead or that I traded it with a friend for something I really wanted.