Can the wood of beetle-killed trees be used for anything?
Yes. The wood (xylem) is largely undamaged in the first year. Although bark beetles carry blue-stain fungi, these fungi do not breakdown wood, they invade the cells but cause no change in wood structure. Although bark beetles can carry other fungi that do cause decay, these fungi typically just decay the outer sapwood of the tree. The majority of wood decay organisms come in following tree death no matter how a tree died, and are typically wind dispersed. Significant breakdown in wood structure takes more than a year. Some homeowners utilize the material as firewood. However, if you choose to keep any material on-site, you should strip off the bark or cover the material with plastic as described below.