In theory, they wouldn't because the actual information is recorded on the aluminium layer under the label. The rest is a plastic layer that the laser passes through to get to the aluminium layer. So in theory, you could sand out any scratches from the underside of the disc, then polish it up and it'd be as good as new, albeit a bit thinner.
There have been products like this around for a while - the top layer of the disc is removed so that the drive can read the pits which are burned into the layer inside (as Ralph says) by removing the scratches which throw off the laser.