I'd rather go through puns than wait another month, but that's just me. :Y
I don't think the Master Sword just rusted away as there's chips in the sword, almost looking like it's been badly damaged through physical force than nature/time/magic. Though with all the Hylia references perhaps it is something to do with Hylia/Zelda and maybe this is it but the implications of physical damage to the blade suggest otherwise. It could be possible that Link's possible defeat is connected with the Master Sword be it through spiritual connection or actually failing a fierce battle.
Maybe Calamity Ganon is so dangerous it personally eroded the Master Sword during its rampage? That'd be terrifying and a catch most players wouldn't expect. But than that raises the question: How to beat him. That could actually be a good premise if done right. It's kind of fun to speculate, but I hope the end product has a more mind blowing explanation.

