I have only culled one guppy out of two batches of fry. The guppy that I culled, was from a moscow blue and she never developed color or a gravid spot. Also, she started to get really mean to the male and she would nip at him and she even tore his tail all the way down to his body.
I ended up dumping her in my soon to be brackish tank thinking either she will be okay in that tank and I won't put any guppies in, or my purple spotted goby would eat her.
I came back to check on her 10 minutes later, she was gone and the goby had a big bulge in his stomach.
If you are breeding fish for looks (like show guppies, moscow guppies etc), I would not keep the guppies with birth defects or that lack the color and fins of the fish I want with the guppies that I want to breed. Show guppies don't seem to breed many times before they die from the stress, so you don't her to be breeding guppies from a male with a serious birth defect.
Right now, any guppies that need to be culled will be put into my baby whale tank (it has A LOT of empty space and they add some life but don't draw attention from the baby whale), fed to my purple spotted goby or taken to a LFS and put into the feeder guppy tank. I wouldn't want to actually kill the guppy unless there was something seriously wrong with it to the point it couldn't live it's life or be fed to another fish.