This story was part of a news report sourced by the daughter of a general on NBC. I saw it between 1987ish (I may be off by a year).

> The project never recovered from this ignominious retreat, and it was canceled in 1944.

It was "cancelled" after a shockingly effective test because the first A-bomb was going to be ready. Multiple projects were going on in parallel. Because bat-instigated fire was still an uncontrollable and unpredictable force to unleash on a population, it was wisely cancelled (the research kept, which is all that mattered) in favor of a more pointed and well-understood system. A big targeted explosion.