Well I don't have a lot of experience culling fish but here are some reasons I can think of for culling.
1. A lot of effort goes into raising discus. If you start with discus that are already deformed and/or have genetic flaws, you're doing a lot of work without the possibility of achieving the best result.
2. Deformed/stunted fish are likely more susceptible to opportunistic disease. While they might not always get sick, it's easier for them to become infected, harbor a proliferating pathogen, and then eventually infect the rest of your tank. Hexamita really comes to mind here. While stronger fish can keep it at bay, a runt's immune system may be overrun.
3. Breeding stunted fish is probably just poor form. Healthy discus have healthy offspring. Breeding and distributing stunted fish or fish with genetic defects probably just pollutes the pool. There is probably a distinction here between a stunted fish secondary to environmental factors and a genetic deformity. (I.e., could a stunted fish without genetic deformity produce healthy offspring with good potential?)
Those are the three big reasons I can think of. I'm sure others could contribute more. In my mind there isn't any harm to raising a stunted fish for your own interest if you accept the risks but probably distributing them is where it gets murky. Hope that helps!