It's true that those are what animals mostly eat - but it's not everything. From the FDA webpage:

Recycled animal waste is a processed feed product for livestock derived from animal manure or a mixture of manure and litter. Animal wastes contain significant percentages of protein, fiber, and essential minerals and have been deliberately incorporated into animal diets for their nutrient properties for almost 40 years. Incorporation of this product into animal diets is a viable alternative to land application or land fill.

Well, it's hard to dispute that shit makes a high-fiber, high-protein diet. Yummy!