From working with industrial automation, I can tell you that trying to synchronize motion between two independently controlled electric motors, with independent loads, is a nightmare. With modern control hardware we are getting better, but we are not there yet. In 1995, I sure that the could make it look good for some tests, but there was no control system fast enough or smart enough to handle it.
Without even looking at the automotive side, i would kill to have a system that can manage multiple electric motors with rapidly changing load conditions for long periods of time without freaking out. The possibilities for material handling systems and machine tending systems make me drool.
It was killed because Detroit couldn't make it work. The idea of wheel mounted motors gets kicked around a lot, because it does have a lot of merits, but there are too many technical problems that need to be worked out yet before it becomes viable.