Yes, McArthur was bent on actually winning the war. Truman fired him, and rightfully so, because under our system civilians control the military and they had determined not to win the war. Once that decision was made, it was McArthur's obligation to do as he was told. He refused, and was justly canned.

I think the real concern with the Truman Administration and the State Department was that this would turn into a nuclear war. The Soviet Union, which tested their first atomic bomb in 1949, was the major backer for the North Koreans, to the point that Soviet pilots were flying a lot of those MiGs that went up against American fighter pilots.

The Chinese did come into the war when Americans pushed above the old North/South border.* They managed to push the American forces back. After that, it was a seesaw action up and down Korea until the fighting ended in 1953.

*My uncle Paul was in Korea when the Chinese came in. His position was overrun and he was captured. To this day, he almost never talks about what happened. It wasn't until his story was told on an NBC News "Profiles in Courage" segment that I learned the story. To this day, I've only heard him discribe anything from what happened to him in Korea once. He described being on the receiving end of a human wave assault.