I think there is a place for kiln drying.
My boiler runs the kiln and heats my home. I used to heat our home with very large outdoor boiler, burning unseasoned wood, straight from jobs.
There are many advantages to my new system, because its also running the kiln its in all year, this means we can also heat our hot water all year, this was not the case with the old boiler, it was too big to only do hot water, so we had the immersion heater on from april to october. The fact that it always lit also means that we can simply switch the heating on if we wish and its on a timer through the winter, so its much more like gas central heating.
I burn manly Pop, Willow and soft wood on the boiler, know these lower grade fire woods can be mixed in with the better hardwood, but like most arb firms we get a disproportionate quantity of these lower grade timbers, so we would struggle to get shut of it all unless it was sold very cheap. I also burn all the horrible lumps any arb firm doing firewood inevitably end up with.
As for carbon, timber landfilled or simply left to rot in the corner of the yard will release just as much carbon as if burned, but with much use being made of the energy. Over the years I've let a great deal of timber rot in this way or bonfired it. I recon my carbon foot print it better now than then.
The RHI is very welcome and has pushed me into getting into fire wood which is something I've being putting off for years.
The kiln does make the whole process faster and more controllable IMO.
As for kiln dried being poorer quality, I really do think this is nonsense. A great deal of firewood is burned unseasoned, I think kilning will general drive up the standard of firewood in general.
I also know I will want to continue using my kiln after the RHI had ended.