Immediately after liftoff the flight instructor simulated an engine failure and the pilot executed a rejected takeoff, landing on the runway remaining. When the tailwheel contacted the runway it began to "shimmy violently and disengaged the steering pin." The airplane veered to the left and the pilot was unable to stop the veer using right rudder and brake. The airplane exited the left side of the runway moving sideways to the right. The right main landing gear collapsed causing substantial damage to the right wing. An examination of the tailwheel mechanism showed excessive wear in both the locking collar hole and the drag links in the tailwheel assembly. Both pilots stated that they had locked the mechanism before takeoff and had good directional control of the airplane during the takeoff run.