That's going to be a longer reply, so please bear with me.
Close to 4 years ago, we decided to drop 6 themes from our assembly for various reasons -- http://www.telerik.com/blogs/6-telerik-asp.net-ajax-skins-going-obsolete
, with Forest being one of them. So that puts your code base at the minimum between 3 and 4 years back.
(Reading trough your SO post, I see that you found the blogpost yourself.)
Trying to reference a skin that is not in the assembly will result in the error you saw.
On the part for automatically fallbacking to default or another skin, that's not quite possible, since when embedded skin is missing, Forest per say, we can't know for sure if it's our own embedded that we've removed or it's a customers skin with the same name that's missing.
You could use RadSkinManager or web.config to set page wide or system wide skins.
You could also use ASP Themes to set common properties for a set of controls.
And finally, to answer the question in the title -- how can and can you utilize legacy themes -- you can't. We've made improvements over the existing controls that are not handled in legacy themes; bug fixes and new controls which are also not covered.
Telerik by Progress