Macbook (Late 2006 13”): lack of destination for the installer+Data securely erased?

The I/O error is an indication the disk has failed. It will not be displayed until many repeated attempts already failed. Eventually it gives up, and that dialog appears.

The fact the disk no longer appears at all is more confirmation of that fact.

Disk Utility's "secure erase" feature was never able to provide absolute assurance that its data could never be retrieved, given essentially unlimited amounts of time and / or money to invest in that effort. It complied with published standards at the time, but those standards have since been superseded in favor of full disk encryption which FileVault provided. If that Mac's startup disk was encrypted with FileVault no additional action is required. You may dispose of the Mac in its present condition, or sell / donate it with the knowledge its disk is inoperative.

A disk that doesn't work has no value, unless you are fond of disassembling them to remove their very powerful magnets and / or repurpose the shiny platters as decorative ornaments.

There may be value in the data they contain, but whoever wanted it would need significant motivation to invest the time and expense in extracting it, with no guarantee of success.

If you remain concerned about that possibility the only practicable solution is physical destruction; one of the options discussed in the NIST Special Publication 800-88 Guidelines for Media Sanitization. "Disintegrate, Pulverize, Melt, and Incinerate" for example.

Other, equally effective methods are left to your imagination. NIST does not address them, and this site may not be an appropriate place to discuss them. They are my favorite techniques though.