I found a work around:

1. Change the COST of all inventory items to $0. (Products & Services- Filter by type=inventory - edit cost to $0) 

2. THEN, make the inventory adjust to get all quantities to zero. (Products & Services - Filter by Type=inventory - check all boxes on page, change all to zero, date as 12/31/20xx and save)

3. THEN disable inventory tracking.

Still takes forever, but better than editing every single invoice the items appear on or making each item inactive and re-adding. 

EDIT: Nevermind. You still have to inactivate each item before you can disable inventory tracking. But at least this was it can be done without messing up your books.