Why refit the Kongō class rather than scrap it?

Should Japan have scrapped the Kongō class during the interwar years?

No; treaty constraints made refit the practical choice, potentially through a very extensive reconstruction.

Treaty replacement rules and the ships' age left Japan unable to exchange the Kongō class readily for new construction. Scrapping them would remove usable capital ships without creating an immediate replacement. A radical rebuild could preserve the hull identity while replacing most of its fighting value, much as Italian reconstructions did. Under those constraints, extensive refit was more useful than disposal.