Hey Ralph,
During WWII, William Jeffers, president of UP was in charge of collecting scrap metal for the war effort. So, when the M-10000 was deemed as obsolete (remember that it did not have a diesel but a Winton Distillate engine), instead of donating the locomotive and subsequent train to a museum, Jeffers decided to lead by example and have the aluminum train cut up and donated to the war effort instead of realizing the historic signifigance of the equipment and saving it. Of course, at the time that the train was scrapped nobody was sure as to the outcome of the war so everything that could be thrown into that effort, was.
In answer to your question, yes, the UP scrapped equipment in Omaha and in Cheyenne, and I'm sure wherever they could find a track and place to get rid of those pesky old steamers and cars that they couldn't sell.
There is still a big scrap yard in Council Bluffs that takes care of old equipment, like the lines of cabooses that I saw going under the torch.
Rick