I've bought for example some Swiss army surplus towels for a bike trip. They were really good (small, durable, functional, beautiful) but a bit too small so you couldn't wrap one around yourself.
They probably get the surplus stuff almost for free, from all around the world. I think it's great, making something desirable out of waste.
Having served, I think a lot of military equipment is really bad, especially clothing. It's bought not by the users but by the organization.