There is a lot of talk here about increasing the quality and decreasing the quantity of Thoroughbreds produced. The talk of quality illustrates a gross misunderstanding of racing and race breeding. And is a good example of why people in the industry get tired of listening to the pretty pony petters.
The talk of quantity also has some problems with its basic logic. The majority of horses in need of homes are horses that are not suitable for racing because they have either become injured or they have proven themselves to lack any real talent - they are no longer suitable for racing. It is not the case that there are hordes of perfectly suitable horses out there waiting for an opportunity but no one has room for them because there is such a glut. Rather, in fact, fields are short at a lot of tracks - a sign that there is a shortage of suitable horses. Even if production were cut in half, there would still be the problem of horses that become injured or lack the talent to earn their keep. And, because racing is a business (which, evidently, is the heart of the problem for most of the pretty pony petters), even if stock is scarce, people aren't going to invest more to keep a horse in training that they can possibly hope to recoup.
To answer the OP's question: I'm all for euthanasia, but as someone else pointed out, I have no doubt it wouldn't take long before certain groups jumped on us like they have dog racing. But, really, shouldn't these questions have been answered before slaughter was banned?