When processed, the meat bits, (and yes they are leftover meat bits), are ground into a paste with water added, (nearly all ham you buy has "Water Added" listed on the tag - exception would be something like "country ham" or prosciutto ham), then pumped into a carboy, (the paste is then called babbit), seasonings are then mixed in and then molded by machine into a glorious block 'o ham! To be sold at your local Deli as part of a delicious sandwich for which you happily pay your "hardly earned" monies.
Eh, such products minimize the waste of things that would otherwise be thrown away and lost. Us humans have been processing the scraps and leftovers of our food into other edible products for as long as we can remember - Waste not, Want not.
The problem is the disconnect modern urbanites have from their food and not knowing how it gets made. If you like deli ham eat it! (in moderation as all things should be), it's not all that different in processing than a hot dog, sausage, or hamburger. Or even cheese.....
How is that any different than a sausage, hamburger, or any other food using ground meat? If we are going to eat meat, it's better to utilize as much of the animal as possible.