It's not primarily about using defective chips (but that's a nice side effect). As a process becomes mature, yield rates become very high and there wouldn't be

It's not primarily about using defective chips (but that's a nice side effect). As a process becomes mature, yield rates become very high and there wouldn't be enough defective chips to meet demand for a lower tier, so good chips are binned into those tiers anyway. The primary purpose is market segmentation: extracting value from customers who would pay more while not giving up sales to more price sensitive clients who nevertheless pay more than the marginal cost of production.