It looks like the case hardening was worn through on the camshaft and once that is gone... its all soft. That soft area doesn't wear very well and as you can see it gets ate up. That pitting is actually the material galling up with lack of lubrication and a soft cam. One of those lifter rollers siezed up somehow and basically turned it into a rounded tappet and let it get ate up by the soft cam. Time for a new cam and all new lifters.