Diamond discusses this strategy in their financial documents. In particular they emphasis the importance of "inventory recovery" whereby Diamond pays the cost of recovering points from members who fail to pay their annual maintenance fees or assessments. They estimate the net cost of recovering a one week interval is $1,500. As a comparison, Diamond is paying $630,000 per unit at their new Kona resort; divided by 52 is $12,115 per week.
The downside of inventory recovery (and voluntary surrenders) is the carrying cost of the unsold inventory. Diamond tells their stock holders they want to recover 2-5% of the total outstanding VOIs in any given year. In 2013, however, approximately 12.2% of VOI owners in the U.S. were delinquent on the payment of annual maintenance fees or assessments (they don't report this figure for 2014).
Interestingly, Diamond's agreements with the HOAs grant them full use of the defaulted inventory for rental and marketing purposes. Even the inventory they choose not to recover.