I really, truly, hope that you’re not serious about sending this horse to the knacker’s over this. You’ve described him as perfect in every other way. You’ve had him a very short time. You’ve brought him to a new environment, new world. You’ve had two pages of suggestions here for things you can try. And the last horse that you got started out as wonderful, great, everything you wanted…then not so good, you wondered about bonding…now, I assume, that horse is great again…
There are lots of emotional ups and downs with any new addition to the barn, and certainly you’re angry and disappointed that the sellers didn’t disclose this to you. I can only say that I spent years dealing with a horse that did not have any bad stable habits. No chewing, cribbing, pacing. But she would bolt, buck and spook and made riding so miserable I would cry on my way to the barn, just thinking about riding. I would have given ANYTHING then to have had a safe, reliable packer like Brownie, and I certainly would have tried to find a way to deal with his vice.
Of course, here in New England, land is so expensive and so highly taxed that we don’t really have to worry about taking care of lovely wood fences 
Where I board, horses are in dirt paddocks with fences made of metal panels, so there’s not much to chew on. Perhaps Swamp Yankees’ suggestion on a moveable round pen will work. And a couple of “chew toys” thrown in to keep him happy.
But seriously, I read your post last night and was so upset it kept me awake in bed, but I waited until morning to post. I truly hope that you will at least attempt to try some of the suggestions here, rather than put down a horse that otherwise does everything you ask of him.
Or, the shorter version…what JSwan said.
