I know this post is old, but I'm new here. I wanted to add my opinion.
I would lean towards euthanasia. I was in the same situation one time. An abused mare I rescued was beyond help and unpredictable under saddle. Since she was grade she could never be a broodmare. The place where I boarded was ready to kick her out due to her unpredictable behavior. In a frenzy I sold her to some people who claimed to be horse trainers. They promised they could do wonders for abused horses with trust issues.
Fast forward a year - I found out the people were not able to do a thing for her. She actually got worse with them. Got to the point where they couldn't catch her, get her feet trimmed, loaded in the trailer, etc. They had tried to sell her but ended up giving her away. I was not able to find out who had her after that. If she got passed on to another family, there could be a problem with her being dangerous in the wrong hands. If she hurt someone, I would still feel bad, and think that it would have been better to put her down. If she ended up at the auction (which I know she didn't) she could have been sent to slaughter, and then I think it would have been better to have her put down.
I really wanted to give this mare another chance at a better facility with people who claimed to know what they were doing. Part of me thinks the mare is choosing her own fate, but really, I should have had her euthanized.
Good luck to you!