It wasn't just the ammunition exploding (though all ammunition types could explode randomly in said gun). The smartgun system was incessantly on the fritz, with such things as the weapon automatically dropping your full magazine once you get into a gunfight; any time you try to put a new magazine in, it won't lock because the smartgun system says there's a magazine in. Or when the weapon overheats so much from the ammo in a single magazine that it welds itself shut. This gun makes the ET video game look good (and ended up buried in a desert as well).
Storm Front does have almost all of the information on it; the original design was to shoot alchemical rounds of some kind (canisters, maybe?) for use against bugs; the Azzies extracted the lead designer for their anti-dragon research (specifically Blue-227, which has its own plethora of unexpected, negative effects on top of hurting dragons) and the project fell apart without their star talent. Some executive decided to salvage what they could and turn the base-line device into a normal firearm and recoup the losses, hoping the extreme PR campaign would make people buy it up. They went all-out on making this sound like the next thing since sliced bread... And it didn't go so well when it was one of the most untrustworthy pieces of technology out there.
