I donate my damaged blankets to the woman who does blanket repair in my area. If they can be saved, she'll repair them & donate to a rescue. Blankets that are beyond repair become "organ donars," she can cut patches, salvage hardware & straps and such from the remains.
~ A true friend knows all there is to know about you and still likes you. -E. Hubbard
I think you are right on track--save the hardware and some of the fabric for future blanket repairs, or make a dog bed, if you can get the blanket clean enough. I'll lay old horse blankets over a pile of hay or straw in the barn to make a cozy bed for the dogs.