A frozen stem is a common problem. Galvanic corrosion occurs between the two metals, in this case alloy and steel and creates a ridiculously strong bond. There are some basic techniques for trying to remove the stem, and twisting the bars in this instance was just going to twist the fork blades.
When hope seems lost I consult the Lord, and while this is a parody, the method works amazingly well without scoring the headset or damaging the stem. Next time you consider cutting a stem out, or even melting it out consider this approach. I wish I had a camera for all the times the Gonz has solved a problem for me. Stuck bottom brackets chainring bolts, stripped threads, cut new threads, braze on cable guides, painted frames, fixed track adapters to disc wheels, the list goes on.
From the man that brought you the worlds most famous fixie - GONZLAB.
How to remove a frozen stem - Gonzlab Bicycle Tutorial from andy white on Vimeo.