Should I really be reusing 40-year-old insulation in a major kitchen remodel?

That dark staining is almost certainly air filtration, not mold, though both are reasons to toss it. When you see those black streaks on fiberglass, it means the insulation has been acting as a giant air filter for nearly forty years, trapping dust and particulates as air leaks through the building envelope. Since you alredy have the walls open for a six-figure remodel, putting that old, compressed, and dirty stuff back in is a massive mistake. Fiberglass technology has acutally improved since the 80s, but the real benefit of pulling it is the access it gives you. Once those bays are empty, you shold take a can of closed-cell spray foam or some acoustic sealant and hit every gap where wires or pipes go through the top and bottom plates. You can't **air seal** properly with the old batts in the way, and air sealing does way more for your energy bills and comfort than the R-value of the insulation itself. I'd suggest upgrading to **rock wool** (like Roxul or Rockwool Comfortbatt) instead of the standard pink stuff. It’s denser, wich makes it much better for fire resistance and dampening the sound of a noisy dishwasher or garbage disposal. It also doesn't sag over time and is hydrophobic, so if you do have a minor leak near that window in the future, it won't turn into a soggy mess like fiberglass does.

The cost of new batts for a kitchen is a rounding error compared to your total budget. Your contractor probably just wants to save the labor of hauling the old stuff to the dump and fitting new pieces, but don't let them cut that corner. Rip it out, seal the gaps, and start fresh so you don't spend the next twenty years wondering what's growing behind your expensive new cabinets.

Have you ruled out whether that staining is just localized to the window area? If the rest of the batts are dry and haven't settled, you might be overthinking the age factor. Fiberglass doesn't realy expire or lose R-value unless it’s been crushed or soaked. Also, have you checked if the modern precut batts will acutally fit your 1980s stud spacing? Sometimes the old stuff is a better custom fit than new rolls that leave gaps at the edges.

Don't even think about reusing that 80s trash. If you're doing a six-figure job, why settle for an R-11 or R-13 when you can easily hit R-15 or higher with high-density batts? While you have the walls open, look into Johns Manville Spider Plus or even just the Owens Corning EcoTouch R-15. The fit is way tighter and you won't deal with the itchy fallout from that old binder. Also, tell your contractor to check the header above that window. If you've got the space, stuffing some closed-cell board like DuPont Thermax in there before you insulate the cavities will kill that thermal bridging that's probaly causing your cold spots. Don't cheap out now.

You realy ought to consider the chemical composition of that 1980s-era binder, as the phenol-formaldehyde resins used during that particlar manufacturing epoch are prone to significant friability after nearly forty years of thermal cycling. While the glass fibers themselves are technically inert, the degradation of the urea-extended phenolic binder often results in a fine, irritating particulate matter that will inevitably migrate into your living space once the building envelope experiences pressure differentials. Furthermore, if that old kraft paper facing has lost its original perm rating due to moisture-induced delamination, you are essentially re-installing a compromised vapor retarder that could facilitate interstitial condensation behind your expensive new cabinetry.