My issue with a Galaxy Class being used in this way is that even if the vessel had become obsolete by general tech standards, it's still an incredibly sophisticated ship that required a ton of maintenance. The GCS was generally portrayed to have several if not outright design flaws, at least several potential issues. The warp core especially seemed to be... delicate.
I'm not sure a ragtag crew of rejects will have the expertise to keep that kind of ship flying, even if it's old. Actually maybe even worse if its old.
Well, technology is not stagnant. Maybe the earliest version of Galaxy Class (TNG season 1) was really has a lot of issue. But even Ent-D had a lot of Refit. Well, it is a fantasy. Even if it's not, the newer Galaxy Class (newer than Ent-D) could get newer Warp Core that has already has resolve the problem.
Just look at how many crew that the earliest Galaxy Class (Ent-D) and later Galaxy Class ships have (Dominion War era). the Ent-D require more than 1.000 crews. It fit with your argument, as the Ent-D, the earliest version of Galaxy Class really was delicate and had a lot of issue.
But look at the Galaxy Class in DS9. They actually had less crews than the Ent-D. So maybe after making several Galaxy Class, they managed to solve the issue, and make the Galaxy Class to be operated by less crews than the Ent-D. So what if the Galaxy-Freighter class get newer reactor? Specially when the role change, the complex system that the Galaxy Class had has been removed for the storage.