You are correct that this issue was "quietly" dropped from the USPS list of 2012 new issues. The following quotes are taken from the American Plate Number Single Society website (apnss.org):
Quote:
The Athletes In Motion issue has been withdrawn, apparently over a disagreement about payment for the use of Olympic symbols. The designs may be reused for a future issue.
February 9: USPS has quietly dropped any mention of the proposed "Athletes in Motion" stamps originally scheduled for later this year. The proposed images have also disappeared from their web site.
February 25: Linn's Stamp News is reporting that the Athletes In Motion stamps that were planned for release around the time of the London Olympics will not be issued. The reason is apparently disagreement over payment for the use of Olympic symbols. The designs may be reused for a later issue.
As far as I know, the stamp designs for this now-tabled issue have never been formally publicized.
[edit] Here's another news report about this subject that essentially confirms the facts stated above:
http://postalnews.com/postalnewsblog/?p=1061