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Nearly infinite odds are that it was canceled because it didn't work. From TFA:
One declassified memo, which seems to be the conclusion of initial research and prototyping, says that Project 1794 is a flying saucer capable of "between Mach 3 and Mach 4," (2,300-3,000 mph) a service ceiling of over 100,000 feet (30,500m), and a range of around 1,000 nautical miles (1,150mi, 1850km). [...] According to the cutaway diagrams, the entire thing would even be capable of vertical takeoff and landing (VTOL). VTOL, Mach 3++, 100,000ft - the only thing it was missing for it to be the perfect military aircraft is a Romulan cloaking device. If the "flying saucer" could meet those specifications, it would still be classified. Q.E.D. it didn't work. |
It would be one thing if we were reading leaked documentation about an experimental aircraft designed 10 years ago. But we're not. We're reading declassified info about an aircraft designed some 50-60 years ago. If it actually worked, a half-century would be a pretty reasonable timeframe from experiment to slightly more mainstream application. If not commercial application, than certainly military or scientific application. And its existence would have turned up by now. Alternatively, it would be so effective and groundbreaking that it would remain classified to this day, and nobody would have declassified any of this documentation.
EDIT: From the (extensively documented) Wikipedia article on the very similar Avrocar:
"In flight testing, the Avrocar proved to have unresolved thrust and stability problems that limited it to a degraded, low-performance flight envelope; subsequently, the project was cancelled in September 1961."