I was so disappointed this failed, and for what seemed like such an incredibly obvious reason.

They tried to use the same viral "invitation only" system that had worked for Gmail for Wave, but apparently completely overlooked the key difference: Gmailers could send and receive emails to people who didn't have Gmail. Wave was only usable with other people who had Wave. And with only a handful of invitations, it was virtually impossible to grow your network fast enough for it to be useful.

If they had made it possible to send regular emails to and from Wave (even just by integrating the existing Gmail account!), but then also let you "upgrade" your message to send a Wave when the recipient already had Wave, I really think people would have been willing to use it long enough for their Wave networks to grow big enough to replace email.