I guess it depends on your enthusiasm for the project and the condition of the rest of the car. If it's in good condition it probably would be a candidate for another engine, as long as you have the time and energy to do the work. If it's a rusty body with a poor interior it might make a good parts car for someone else... It might be fun to put a 560 engine in it...
It will be interesting to hear what let loose in the engine to cause it to seize so solidly. I suppose raw gas in a cylinder could cause the rings to go into the cylinder wall and bring things to a halt.

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Richard Wooldridge
'01 ML320
'82 300D 4.3L V6/T700R4 conversion
'82 380SL, '86 560SL engine/trans. installed
'79 450SL, digital servo update
'75 280C