Why would hot-packed green beans go bad when still sealed?
I know this is kind of old but unless green beans are pickled or processed as in the link below, they are considered not safe (NOT safe to waterbath unless pickled). So in answer to your question, if they were not process in a pressure canner at the appropriate pressure for your altitude and for the correct length of time for the jar-size, then that would be what caused them to go bad. 

http://nchfp.uga.edu/how/can_04/beans_snap_italian.html


you said the jar is sealed and they are nasty smelling/looking - that specific problem is often due to a false seal from either stacking the jars or storing them with rings on. If the seal breaks for whatever reason, the ring being on can cause it to "re-seal" after letting air and whatnot in/out of the jar. It then gives the appearance of being sealed while actually being quite gross/unsafe. To prevent this, rings should be removed 24 hours after the item has been out of the canner.