I'd guess originally the idea was for the artificial final pokemon to be based around the reviving fossils idea, but then they made Mew/Mewtwo and decided to take the clone/genetic engineering route. Plus while Mewtwo's og design was also kind of freaky and ugly, maybe they felt this one was too much.
As for why none of the betas will never see the light of day, it basically revolves around Japanese ethics and culture. They will never take fan feedback from something they consider to be a stolen product that they never intended to show to anyone (Which in the end, that's exactly what it was) regardless of how much people turned out to like some of the designs.
I could see an American company throwing a few in that people liked, and probably leaning more towards showing off beta designs in an official way, but not an old-school Japanese company. Best we can hope is they lighten up in a decade and maybe say a bit more in a text based interview, or more betas are leaked.
