Not necessarily.
TracFones are GSM, TDMA, or CDMA depending upon the region. Even if the GSM phones are GSM 850/1900, that's still useful elsewhere in the Americas once the phone is unlocked (note that TracFone itself is a subsidiary of America Movil, a Latin America mobile phone company).
There are several countries overseas in which CDMA phones will work (including Israel).
However, the number one reason for bulk buying TracFones is that the packages can be broken up. The SIM cards (in GSM phones) have airtime that is generally worth the cost of the phone, and the battery and charger sold separately is worth that again.
Either the phone is tossed out, or if unlocked is again reusable on the secondary market. Unlike some European countries, it is perfectly legal to unlock a phone; when you buy a phone in the US, title to the physical phone transfers to the purchaser even if the purchase price was heavily subsidized. Without a contract (and since it's prepay there's no contract), there's really no legal recourse for the prepay company if the purchaser unlocks the phone and resells it.
TracFone attempted to claim a DMCA violation against one unlocker (Sol Wireless Group), but I don't think that got anywhere.
Strange to say, though, unlocking is not a big thing in the US the way it is in Europe. Most unlocked phones sold in the US are from Europe...
-- Mark --