Bullet Row, a nondescript street that slices through a grimy labrinyth of red brick factories at the Frankford Arsenal here, is mostly deserted and forgotten these days. But the older, more sentimental workers still call it "the street that beat Hitler."

Here 22,000 workers, many of them women, toiled around the clock during World War II at clacking and clattering conveyors heaped with brass shell casings, producing 1 1/2 billion bullets - which was every small-caliber round fired by American troops in the European and Pacific theaters.

Here a paper and powder wad factory serving union riflemen in the Civil War evolved into one of the world's biggest munitions manufacturing centers.

Here engineers and assembly line workers alike still boast of a long line of first - the first recoilless rifle, the first "snooperscope" for World War II GIs, the first laser rangefinder, the first aircraft seat ejection and the first computer-driven fire control system.

But despite a promise by Walter Mondale the night before the election that the arsenal would not be closed and its 2,000 jobs not lost, the Army announced yesterday that the facility would be shut down in the fall.

Amid increasingly bitter charges here of campaign "double-crosses," political favoritism and military-industrial pressure tactics, Vice President Mondale said yesterday that "the costs involved could not justify a reversal of the decision" to close the base.

In a statement with "mea culpa" undertones, the Vice President said. "I regret that I have not been able to keep this promise" despite a sincere and conscientious effort.

When the Army ceremoniously lowers its flag for the last time at the gate of the sprawling arsenal, it will signal not only the demise of a 161-year-old military landmark but the passing of an era of weapons preparedness that critics of the closing say will compromise national security for years to come.

The Army, following a major policy shift initiated in 1964 by then Defense Secretary Robert S. McNamara and reaffirmed by his successors, has been slowly phasing out its own weapons research and development and turning the bulk of it over to private industry.

The shift, urged in 1963 by a 22-member study panel that included 18 top executives of defense-contract or companies, has stirred fears in some quarters of the military that the United States may no longer be able to mobilize quickly in the event of war.

The closing has also stirred the passions of politicians and special-interest groups.

Volatile Mayor Frank Rizzo has charged that it evolved out of a vendetta by former President Nixon, after the city in 1972 put four Democrats back in Congress and delivered a plurality to the Democratic presidential ticket.

Supporters of Rizzo have since weaved a conspiratorial theory that says President Carter's well-publicized hostility toward Rizzo helped doom the arsenal after the change of administrations.

Carter in his recent nationally broadcast question-and-answer radio program said he would "do everything possible to honor (Mondale's) commitment. He said plaintively, "If there is one question the Vice President has talked to be about since we've been in the White House, it is the Frankford Arsenal."

Mondale said yesterday that he has instructed Defense Department officials to make concessions to Philadelphia, that a naval international logistics office employing 500 persons would be transferred here, and that 700 new jobs will be added to the Philadelphia naval shipyard.

Also, Frankford officials say that 1,200 employees are being offered jobs at Picatinny Arsenal in Dover, N.J., 80 miles to the north, where the remnants of the Frankford research and development operations are to be moved.

But officers of the arsenal union, the National Association of Government Employees, claim that a poll they conducted shows only 200 would actually make the move.

Overshadowing the arguments over the loss of jobs and the local economic impact are more cosmic questions about the effect on the nation's ability to mobilize in time of war.

Thomas Odom, a physicist and director of product assurance, estimated it would take Picatinny Arsenal 10 years to gain the engineering capacity lost with Frankford's closure.

He said that when the Springfield Armory closed only 54 employees transferred to Rock Island, Ill., where some of the Army's research and development functions were moved, and that the Army had to begin anew to develop "hands on" expertise in new employees.

"Just because a guy has an engineering degree or some training in machine work doesn't mean he steps right in and become expert in weapons development. It takes years to grow with the commodity," he said.

Odom, who earns $36,000 as Frankford's top quality-control official, and says he will retire rather than move to Picatinny, recalled that with the advent of space technology the arsenal system lost many professionals who lured by more money, became "gypsy" engineers, moving from one defense contract to another.

Those engineers, Odom said, have never stayed with one project long enough to develop what he called the "breakthrough capacity" - such intimate familiarity with a project that seemingly insurmountable obstacles can be broken through by sheer weight of knowledge.

"Now they say the Army is going to be a smart buyer and save money by letting private industry do the research and development. But industry's track record on defense contracts isn't so hot," Odom said, remarking on huge cost overruns for several major projects.

He cited the Springfield M-85 tank machine gun. Before the closing of the Springfield Armory it cost the Army $1,715 apiece. A fter General Electric Co. took over the contracts, it cost $4,800 apiece, he said.

Moreover, according to Odom and other engineers and workers interviewed here, the Army will not even be able to function effectively as an evaluator of the quality of new weapons, because it will no longer have enough experienced technicians. Odom went on:

"This country was never built on a munitions industry in peacetime, and we survived World War II. We always had the in-house capacity to transfer quickly to private industry in wartime, and we always came out with superior material. So why change the system now!"

Odom suggested that the military industrial complex, which he termed a "club" of industrialists who constantly shift back and forth between government and private business, had become "enamoured with the idea of getting into the munitions business" and had exerted enough influence on Congress to approve of arsenal closings.

The Army says closings Frankford will save $23 million and result in a more consolidated and streamlined research and developent system, with armament developing being done at Picatinny, Rock Island and Watervliet, N.Y., and testing at the Aberdeen-Edgewater complex in Maryland.

Lt. Col. Frank Hackley, the arsenal's commander, said that many structures at Frankford are obsolete and that previous consolidations of defense operations have proved that the government can save millions of dollars. He observed:

"The arsenal system in peacetime is extremely vulnerable when people begin looking around for ways of saving money. On one hand, the public is complaining about not trimming the fat on defense budgets, and on the other it raises Cain when a base is closed."

Hackley said that, among some Pentagon officials, Frankford has an image of being as "stagnant" as some of its old buildings, and that it has become known as a "retirement billet" for its succession of commanding officers.

"All the blame does not lie in Washington. Some of it rests here. People over the years could have tried harder to modernize," he said.