The goal was never to kill alcoholics, but to prevent them from stealing industrial alcohol. I think the people behind it didn't think anyone would be stupid enough to try to drink or sell this stuff.
While it might be comforting to believe this, there's strong evidence that while directly killing alcoholics was not the goal, it was a known and acceptable collateral damage. Even after being confronted with the unprecedented number of deaths, the official response from Wayne Wheeler (the leader of the Anti-Saloon League and generally acknowledged architect of Prohibition) was that "The government is under no obligation to furnish people with alcohol that is drinkable when the Constitution prohibits it. The person who drinks this industrial alcohol is a deliberate suicide."
https://books.google.com/books?id=8gAtAgAAQBAJ&pg=PT173&dq=%...
Edit: Here's a political cartoon from 1927 attacking Wheeler for the deliberateness of his approach: http://archive.lib.msu.edu/DMC/tribune/trib00000000/trib0000...
It still contains bittering agents, vomiting agents, and some other stuff that's nasty but won't kill you (I think some of it is denatured with petroleum as well at like 1%). Drinking it is gonna make you a bit crook, but it won't kill you any more than a bottle of vodka.
I guess the government decided that killing alcoholics isn't the best course of action.