Yep. Sounds like a bad switch. The original 72 and up ignition switches last 20 - 30 years or more . . . if you get a couple of years out of a replacement, you're doing good. I've had tons of them that would "start" and then die as soon as you let the key go to the run position.
I may be dreaming here, but I'm sure he'll chime in and correct me if I'm wrong, but I think it was Ret.Bugtech that once told me the switch for the early water-cooled stuff was the same part as the 72 and up Beetle switch, but due to the way they were wired, the water-cooled stuff didn't carry near as much current. So, eventually, the contacts were changed (cheapened) . . . and they worked fine on the water-cooled, but the amout of current across the contacts on the air-cooled burns the cheaper contacts up fairly quickly. Again, I may have dreamed that up . . . or someone else may have told me that and I'm just thinking it was David.
At any rate, it may work turning it with a screwdriver because of the extra pressure of pushing in and twisting that you don't have when actually turning the switch with key.