Your title says something and post saying something else that question related to the gift card. However, I haven't used Bitcoin ATM ever since Bitcoin is not legal in my jurisdiction. Even during live abroad hadn't used it since the situation was the same in my jurisdiction. It really depends on the jurisdiction where you are, and the availability of Bitcoin ATMs. No idea how Bitcoin gift card works, there shouldn't be pre-generated private keys anyway.
You are correct. I personally didn't think I would use a BTC ATM, unless it was for a quick (last minute) purchase as a gift to someone. In which case I assumed they would print out a paper wallet that has private keys. Hearing from other members, I was very far off on my assumptions, and that is probably not how it works.