That's a five year old server. That's worthlessly depreciated in just about any organization.

Well, if they were in any way savvy (which I believe they are), they would sell a machine like that or donate it to another project. In this instance, I imagine, instead of selling/donating they repurposed.

For instance a while back Mozilla was giving away old Mac minis: http://armenzg.blogspot.de/2014/05/do-you-need-used-mac-mini...

i think in most countries the pipe is always more expensive than the server

Are there tax advantages of donating old equipment to certain good causes?

It seems easier than the alternative of selling the hardware on ebay.

Yes there is in most jurisdictions. The company can write off the value of the hardware against their taxable profits. However the Mozilla Foundation is a non-profit, so I'm not sure that applies.

Silicon Valley problems