When someone has skin reduction surgery, can that skin be used for skin grafts, burn victims?

Sometimes. It really depends on the quality of the skin. But, often, it can be donated.
Dispose or other use. In the vast majority of instances the tissues are discarded as medical waste and incinerated. On occasion the tissues may be used in the same individual as a pedicled flap as seen in the tram flap procedure for breast reconstruction. The component tissues can be used as a skin graft or the fat can be harvested and used for breast or buttock augmentation use in other people is cost prohibitive.