Izual dropped it for me and I saw the orange text and grabbed it before I realized it was trash. At this point, it cannot be dropped, sold, salvaged, or taught to the Blacksmith if he already knows it. I'm guessing the intention is for it to be droppable like the ingredients for the staff, and it is simply bugged.
Hopefully I can ditch it by putting it on a new character and deleting that character, but I just thought of that and haven't had a chance to try it yet. Good thing I'm not using all my character slots.
We changed these items to not be dropped in the [url="http://us.battle.net/d3/en/blog/6457499"]1.0.3 patch[/url] because players were throwing them away and then reporting that the item "disappeared". The developers are currently looking for alternatives for this, but right now it is intended for the item to not be dropped.
busticat3d has a good workaround for you to use in the meantime.
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