Any thoughts on why my sure-grip did this?

I can see why the third member was free...I definitely would not be driving on that. I would think a used cone sure grip would drop right in and be on the cheaper side of doing things.

From what I can see, it looks like the shaft that the spider gears ride on started chewing its way through the sure-grip. I'd like to see some pictures of the innards if you decide to keep and you get it taken apart.