I think you're onto something. Teaching them to buy used is excellent — but shopping as recreation can and does lead to problems. Of course not everyone who shops at garage sales is a hoarder. But the hoarders I know do frequent garage sales and do that same thing as your kids are learning to do: "This is so cheap! Only a dollar! And I like this kind of thing! I'll buy it!"
As I see it, the garage sale experience has to be balanced by other kinds of learning too. One is what other posters have mentioned, that things have to be gotten rid of as well as obtained. This is going to be a lot harder for kids than learning to spend. Maybe it needs to happen before you go to the sale: "If you can find a handful of toys for us to take to Goodwill, then you get a dollar to spend at the sale. Or you can keep your current toys, your choice."
But another is to learn that there are other excellent things to do with that money. Right now every time they go to a garage sale they get free money. It's as if money is generated by shopping. They need some kind of structure where they're making the choice between spending and saving for something greater. Maybe every time they save $10, you give them $1 in interest. So every week it would be "Here is a dollar — you can spend it for toys at the garage sale (although you do have a lot of toys already), or you can save it in this piggy bank and when you have $10 you'll get another dollar. Then eventually you can use that money for X, Y, or Z (good things that they might use that money for, maybe some experiences rather than just more toys)."
Again, I think you're spot on to be alert to the messages you're giving them.