The Kistler K-1 also planned to use air-bags for a 'soft' landing (
http://www.rocketplanekistler.com/flightprofile/fp04.html), although that's a more conventional vertical touchdown with parachutes.
Would love to see any pictures of the C-123 test!
P.S. Sorry forgot to ask, was the shuttle proposal purely about saving the weight/complexity of the undercarriage?
Update: Missed the report link - to answer my own question the report intro claims:
[quote author=NASA CR-111803 report]
[...] the following advantages could be expected if the ACLS [air-cushion landing system] were used on Space Shuttle Vehicles:
(1) Reduced weight of ACLS relative to the weight of conventional gear
(2) Reduced vehicle structural weight due to reduced landing load factors and distributed rather than concentrated loads
(3) Land, water, and rough field capability with resulting reductions in runway requirements and/or increased probability of safe recovery from launch aborts or emergency landings
(4) Ability to land in cross winds without decrabbing at touchdown
(5) Increased ground mobility: towing or taxiing over unprepared sites; lateral ground handling in confined spaces
(6) High speed landing capability, with possible reduction in landing attitude or reduced subsonic aerodynamic requirements
[/quote]