Clothing wears out; that's just a fact of life.
Other clothing are no longer appropriate; I am changing size as I get more fit, and it's nice to see some stuff will never fit right on me again.
However, it can be difficult to toss clothing. Clothing is not just a covering for the body; it is a repository for memory and personality. Pitching it, as needed, can feel like a loss. It also feels wasteful to clog up landfills. My contribution may be small, but it adds up.
Fortunately, recycling clothing feels like growth. The easiest way is when the clothing is still useful, just no longer appropriate for me. Reselling it at a consignment shop, on ebay or craigslist, might provide a little cash to sooth the sting of parting. Offering it through freecycle or one of the "Buy Nothing" groups of facebook offers a different reward, that of community. But there remains the old cloths that are too worn to give away.
A small amount of the fabric can be used in projects. I've used the canvas from old jeans as plant blocking cloth, and little bit of cotton fiber might be o.k. in the bottom layer of a planter. A few rags can be used around the house as rages, but there's a limit to how much of that I need.
Therefore I was greatly cheered to be informed of a place (conveniently located at my gas station) where I could drop off a bag of clothing, however worn, and the fiber would be recycled. As I go through my house, downsizing that which I no longer need, I find the process is simplified when I have a bag labelled "rags"