You can now put a Cat B back on the road after the VIC check so long as they have not removed the VIN's or chassis numbers which they are supposed to do, but now breakers arent due to the VIC checks.
I used to be of exactly the same opinion that you cant put them back on the road, but it all changed when VIC came in, despite them saying Cat B's the chassis should be crushed etc. If it goes to a breakers and they sell it on and you take it for a VIC check, they also access it and will mark it as "Substantially Repaired" as well as check the identitity. Even if it has a Cat B marker, after the VIC Check and you apply for the V5C, it will be marked with Substantially repaired on the V5C.
Would i touch a Cat B? Depends on howmuch damage there was...