If it failed to launch there is a usual cause, the batteries fail over time. these aren't normal batteries either and they only last so long in any harsh environment. If these soldiers aren't taking care of them properly or if they are too old then they don't work and must be replaced before the launcher will function. Since the US Army didn't have a great need for Air Defense systems in that conflict I can well understand why they would not be performing proper maintenance checks on that stuff.
But there is ZERO reason for it to be destroyed. None. Nada.
Nada, sorry man, but you have not considered what your talking about. The US Army has always run large munitions stockpiles, sooner or later it all get's old and unstable and every year some of it must be destroyed. As stated earlier, this isn't just about bullets, it's about everything that's not Nuclear or "Special Munitions". Some of these things get very unstable after awhile and so every year they buy new stuff and destroy old stuff.
On the one hand you have something like 5.56mm and yes, every year the military services get together and someone says I got extra 5.56mm this year, who needs some? Sometimes someone does, sometimes they have their own excess. That's OK, it can still be used next year and 5.56mm can stay awhile.
But now let's look at something unique to the Army, 165mm M135 Gun on the M729 Combat Engineer Vehicle(CEV).
http://en.wikipedia.org/wiki/M728_Combat_Engineer_Vehicle
The M135 fires High Explosive Plastique (HEP) rounds, a projectile that consists of a propellent charge and a 65LB Plastic Explosive warhead.
http://uxoinfo.com/blogcfc/client/includes/uxopages/Mulvaney_Details.cfm?Ord_Id=P160
Today, the M135 gun and the projectiles for them are no longer in service. No other branch of the DoD uses this gun or munition. A few of these vehicles were sold to foreign countries, and stocks of the Munitions for them may have been sold as well. But in short, unless someone bought the war stocks of these munitions then they would have been scheduled for destruction.