I'm sad to see that Google will be pulling the plug on Wave. I think that it was a fantastic product, but Google wasn't seeing the kind of usage that they needed to see in order to continue supporting it as a product.
My (wholly unqualified) opinion on why it failed is that 1) it failed to have a simple description or explanation, and 2) it didn't receive a lot of attention or advertisement.
When I got my invite to Wave, I was working at a company that blocked access to it right away, so I could only use it at home or on my phone (which only had EDGE service in that particular area.) If I'd had access to it at that vital time, I would have been much more likely to incorporate it into my daily workflow. So, I'm saying thr I am certainly guilty of participating in it's downfall.
I am happy to see that Google intends to reuse some of the parts of the engineering effort to incorporate into other products. I'd love to see a web-based live collaborative (coding) text editor, along the lines of SubEthaEdit, including syntax highlighting at least, and maybe some other coding niceties. (I have not yet looked to see if this exists yet; it just occurred to me.) Google Docs may suffice; I'll have to play with it.