Unfortunately, there was no DVD release of DKS in the US (or UK). Even in Canada where there was a release, it is mostly just available from Amazon or Gamestop (Best Buy, etc, only have listings for the original D2:ED), or at least that was the case the last time I checked.
If you get the (digital download) add-on Flames of Vengeance, there is a patch to convert D2:ED+FoV to DKS. That would be a bit more of a hassle than getting DKS, though, and could be more expensive depending on the price you paid for D2:ED.
There is no general trade-in or upgrade program (that would require different publishers, retailers and distributors working together). Steam offered DKS at a discount to people who bough D2:ED through them, but that's about it.
Some retailers buy used games and resell them, but I don't think you'd get most of your money back that way. You could try selling it on eBay, or something.
It is not that uncommon to have different versions of a game available. When I bought the diamond edition of Neverwinter Nights there were lots of copies of the gold and original releases available (sometimes at a higher price), as well as the separate add-ons.
I once saw boxes of an MMO game on store shelves after the servers had been shut down. I don't think retailers make much effort to keep up with individual games, and doubt distributors or publishers make any effort to recall 'outdated' products (at least in certain cases some people may prefer the original products to the update).
