How can I display 3 lines of text at a time onto 1 line?

You might be able to use paste:

$ paste - - - <data.txt
1 data      2 data      3 data   
1 data      2 data      3 data   
1 data      2 data      3 data

Here's one way:

$ perl -pe 's/\n/ / unless $. % 3 == 0' file 
1 data    2 data    3 data   
1 data    2 data    3 data   
1 data    2 data    3 data

Or also sed by "N"omming two lines and then nixing the newlines in the resulting buffer.

sed 'N;N;s/\n/ /g'