Euthanising is often the kindest.
People here are hard.
If the OP had kept the poor little bugger stalled, you'd all be saying she was being cruel.
Regardless of the method, it sounds like other than giving some of the folks on here the warm fuzzies (I'm sure the OP will let you catch her, transport her and rehome her) there is really no reason to keep a horse that is unhappy, and unsocial (regardless of the reason) that has zero quality of normal horse life, would not likely last long in the wild, alive, just because if you do all sorts of chute, pen, stall, pad, whatever kind of stuff has been suggested on here, you can.
So no OP, you are not nuts, unkind, unfeeling or anything of the sort. You are looking for a solution that will be the least traumatic to all involved. That said, unless you know a really good marksman who is actually willing to shoot a pretty little horse, (and just because someone works for Fish and Game, does not mean it won't take more than one shot) you will likely have to catch and contain the horse for euthanasia. Yes, it might not be peaceful, but at the end of the day, it's probably the most humane thing to do.