What is the scientific principle behind why ice cream turns gritty ? Once it has reached this stage, other than throwing it out, what can be done with it ?

I would say that it grows bigger Ice Crystals.

I’ve experienced ice crystals but at least they melt in your mouth.

The grittiness, however, does not and that’s what makes it so obnoxious on the tongue. It’s not really large crystals. It’s like pervasive very fine sand.

“The size of the ice crystal is critical to the ice cream’s quality. For a smooth consistency, ice crystals should be small. Large crystals lead to a coarse, grainy texture. Crystal size depends on how quickly the ice cream is frozen. Slow freezing gives a small number of large crystals, whereas fast freezing promotes a larger number of nucleation sites and, consequently, a large number of small crystals.

Of course, just because those ice crystals are small when the ice cream leaves the factory doesn’t necessarily mean they’ll still be small when they reach your banana split. If the temperature increases during shipping, storage at the grocery store, or even as the ice cream is transported to a consumer’s freezer, those tiny crystals can melt and recrystallize into larger structures. “The manufacturer can do everything right, but the product can still be bad when the consumer gets it because of bad retailing,” Goff notes.” Source

Ice cream is actively stirred while it is freezing. When it melts and refreezes it is being still-frozen, so crystals will form. If you have an iced cream maker, you can let it melt to a batter, and refreeze it while stirring.