Kirk Manufacturing toyed with the stuff building a one piece magnesium
frame in the '70's, I think. but it never panned out.
I don't think anyone has come up with a mag alloy that can offer the
specs needed for a bicycle frame; Stiffness, strength, fatigue
resistance, etc. but I could be mistaken. Remember also, if the pro
racers don't like it, it doesn't really matter what suits the rest of
us.
Besides, carbon fiber is lighter, does meet the requirements and is much
easier to manufacture. I don't think we will be seeing to many new
exotic alloys anytime soon, the current direction is composites. I'm
suprised they haven't started with boron fiber yet.
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