As pointed-out above, Magne-Traction didn't figure into the failure of TruTrack. That feature wasn't in any current products at the time, and wouldn't be revived for a few more years (1976).
The oxidation of the aluminum rails was definitely the issue. I've been told that the problem never really manifested itself until the production quantities of the straight and curved sections were shipped from Italy. A month or so in the hull of an ocean-going vessel brought the problems to light. Prior to this, the samples were sent via air-mail, and thus the oxidation wasn't caught until later.
As Lou N pointed out earlier, the big dealers at the time wound up with large quantities of the track for sale. Lionel actually published a Service Bulletin in October 1976 offering the track for sale to service stations, but they advised it was NOT for layout use -- only for display. This included the straight and curved sections, as well as the matching roadbed.
I've never really discovered how the other pieces -- the switches and terminal track -- made it to market. I'm not aware of any paperwork to indicate they were officially sold, but on the other hand, there are too many examples of these items out there to indicate that just a few "snuck out."
Lastly, both Super O and TruTrack were evaluated while designing FasTrack.
TRW