On a farm scale, if she isn't limping, then sending her to market makes the most sense. However it sounds as though you may prefer to make your decision based on other factors.
(And yes, if she's limping you can't transport her, so she'd have to be shot / pts on farm. If you'd want to put her in your own freezer the vet may be able to write you a certificate saying she's fit for human consumption, but I don't know if you have anyone who would come to the farm to slaughter and butcher for you. We have a chap will come to slaughter and take away cattle that can't be transported, but whether anyone would turn out for one old ewe...)
I've seen a fair few of these granulomas treated, with and without cauterising, with and without bandaging and with and without Cheviot paste. Sometimes the granuloma comes back and the animal can't be kept sound, but often one treatment is enough.
I wouldn't get too carried away with the spectre of 'an operation' - to the sheep it'll just be a rather vigorous foot-trimming session and there will be a lot of blood afterwards. (Oh, and if the cost of an 'operation' was a concern - the vet won't think ill of you if you ask for a quote! It shouldn't be too expensive - a callout, a simple procedure, a few jags.)
If she's not in lamb and she walks sound then market is an option. If she's lame, or you don't want to put her in the fat or eat her yourselves, then I'd get the vet to cut it off - the op won't kill her and might give her another few years.
If she is in lamb, then if she's now comfortable on the foot then personally I would leave it until after she's lambed and then get the vet to cut it off.