Every Googler I spoke to (OK, both of them) about the now cancelled Google Wave, I asked when it was going to be incorporated into GMail.
There was some very interesting technology in Wave and some really compelling ideas on how to facilitate rich real-time online conversation. There were also some usability issues, but those are the sorts of things that can be, and were being sorted out. The big hurdle was always convincing people that using Wave was a better idea than sending an email, pinging someone on IM, writing a note on Facebook or any of the thousand other ways people communicate over the Internet these days.
As a writer of collaboration software, the “How do I get people to use it?” question comes up a lot. To get people to use your application you need to give them a compelling reason to visit the site: not just once to see what it’s like, but every day to check what's new. For social software you need to get over the Catch-22 hurdle: you need content to bring people to the site, and you need to bring people to the site to generate content.
You need a circuit-breaker: a path from the old way of doing things to the new.
Wave was supposed to be an email killer, but there was never any migration path. Google Talk and Buzz both benefit from a presence in the GMail UI: I wouldn't even know Buzz existed if it wasn't reminding me from my Inbox. Integrating Wave with GMail seemed to me like the logical next step, allowing GMail/Talk users to enhance conversations amongst themselves while somehow keeping non-Waved participants in the loop.
Sticking Wave in a quiet corner and not letting it play with the other children just seemed like a bit of a waste.