Ok, as an FSO through the 80's, I'll bite.
those in charge......were actually proposing a display console for FSO's that worked on flight plan inputs and dead reckoning
That's because they were trying to come up with a way of automating the system that provided a service to the 80% of Australian airspace that was not administered by ATC, and mostly didn't have radar coverage. Don't forget, outside radar coverage, ATC in CTA was provided procedurally by using pieces of paper and a map, just like FIS OCTA.
...canned the proposal after some units were produced
That's because they couldn't get it to work. There were just too many variables OCTA and - shock horror - pilots didn't always do or go where they said they were going. ATC then (and probably still is) was designed to get VH-ABC from A to B along a clearly defined route. Everything else was left OCTA. ATC's system was designed to provide a service to a fixed limit - once that limit was reached, it was "Clearance not available". OCTA, the work was whatever the situation was (ex FSO's will remember the fun of a "full board" and more). The automation of the time could not handle this. Pen and paper and eyes on a map were considerable quicker than data entry into a keyboard.
Radar at the time was pretty basic. "Shrimp boats" were still manually moved along the screen to identify the targets. How they were ever going to get that system to work OCTA was beyond me, and obviously them too. OCTA pilots could and did fly whereever they wanted, that was the whole point, so if radar had been provided to FS, I'm sure the flight following regime would have been substantially different to cope. I'm sure that if every paint that wandered off track had to be queried as to it's intentions the system would have very quickly become unworkable. You would have had one system for CTA, one system for OCTA with radar coverage, and another for OCTA without. It would never have been feasible, and in the end it wasn't.
MDX at the time was OCTA, and
noone was responsible for his track keeping and intentions but the
pilot.