According to Lebo's book, that scene was shot in midtown Manhattan on a very hot, heavily trafficked day, which made completing it next to impossible. Plus, he claims that there was so much blood used in the scene, that it wasn't even believable. Those are the main reasons that the scene was scrapped. I don't have the book in front of me, but that's the gist of it.

You should really pick up THE GODFATHER LEGACY to read about it in detail.