Dogs are not like humans. Their memory doesn't work in the same way as ours, and their instinctual pack mentality makes them default to following the strongest dog (or human) who asserts a leadership mentality. This allows them to move past their problems a whole lot faster than humans. If a strong "pack leader" is around to force them to confront and overcome their problems, they do.
Rescue dogs are put through a battery of tests to ensure that they will not be a danger to anyone or anything else. This includes introductions to strangers, how they handle loud noises and strange objects, food aggression, how they behave on the leash, and how they behave around other dogs. Failure of any of these tests can range from as minor as contuinued rehabilitation, to as serious as euthanasia. Not all dogs can be saved, and scared/reclusive dogs are just as common as aggressive/violent dogs in these cases.
Considering the high profile of this case, I wouldn't be surprised if Ceasar Millan is taking some of the really serious, unadoptable cases in an attempt to rehabilitate them himself. He built his reputation by working with aggressive pitbulls and rottweilers with dog fighting backgrounds--cases that are usually considered "unsaveable". One of the sweetest dogs he owns is missing an eye from a fight, but you would never know the violent background from the dog's demeanor on his show.
Euthanasia is why cases like this really disgust me. If a human was enslaved and forced to fight or face torture/death, we would never dream of putting them to sleep because they are too far gone. Charitable rescue organizations that rely on private donations are the only hope for these cases.