Original art was given away to M***** Bullpen visitors in the 1960s and 1970s. And a lot of stuff just walked out the door over the years when people began to realize it was worth something. If my recollection is correct, when Kirby requested the return of his original art, M***** could only account for about 20 percent of the work he produced during his Silver Age tenure (finding about 2,100 pages out of nearly 10,000 pages). Which, in itself, is a staggering number.

Edited to expand my recollection. Re-edited to correct the art page numbers. See my subsequent post below.

Okay, here's a partial answer to the main question of this thread, pulled from an interview JB gave in Issue 12 of The Jack Kirby Collector (reprinted in Volume 2 of The Collected Jack Kirby Collector, page 129):

"...What is difficult for many people nowadays to imagine is that the artists didn't want the artwork back. There was no market for it. What were they supposed to do with it? And it is important to remember that comics are, after all, an extension in a way of the commercial and advertising art fields, and there is no return of artwork there. The up-front money is considered a buy-out..."

"...I thought it was particularly two-faced when they [ DC ] took out a full page 'open letter' in various trades demanding Marvel return Jack's artwork. The only reason DC was not in the same position as Marvel, after all, was that Marvel had a policy of warehousing the artwork it kept, while DC gave it away or destroyed it."

I'm not about to transcribe the full interview; there are additional details by JB about the treatment of Siegel and Shuster, Kane, Ditko and others. It's two pages long and an interesting read.

And on the topic of missing Kirby artwork, there is an article by Glen Gold entitled "The Stolen Art" in Issue 19 of The Jack Kirby Collector (reprinted in Volume 4 of The Collected Jack Kirby Collector, pages 212-213).

The article details how DC had a policy to destroy original art to ensure copyright protection, the legal argument being that if an artist claimed ownership of the art, he might have a crack at owning the character. (Which offers a rationale why M***** was hesitant to return pages to Kirby.)

It goes on to report that most of the art that Kirby drew for Timely/M***** prior to 1960 was discarded to make room for new Silver Age art that was warehoused during the M***** years until the company began returning art in 1974. Of the nearly 10,000 pages Kirby drew during the 1960s, only 2,100 were accounted for and returned to him in 1987. (It's my understanding that writers, inkers, letterers and colourists also get a portion of the original art returned to them. The article is unclear how many pages if any from the 10,000 went to Kirby co-creators.) 

So, what happened to the remainder? The story concludes much of the art was stolen, providing details on how items from the M***** master list of warehoused art began showing up for sale at New York conventions. The corporation was asked to step in and get the art back, but they claimed their master list of holdings wasn't accurate and they couldn't prove the art was in fact stolen. (Which, considering prior to 1974 that original art was oft-times given away, is an understandable position for M***** to take if accurate records were not maintained.)

Again, an interesting article and well worth a read.