Wave’s biggest problem was indeed the adoption rate, and of course:

• No one that needed to know about it, knew about it.

• Some were excited to use Google Wave as a replacement for Gmail, alas you could only ‘wave’ with other ‘wavers’.

The Official Google Blog:

Wave has not seen the user adoption we would have liked. We don’t plan to continue developing Wave as a standalone product, but we will maintain the site at least through the end of the year and extend the technology for use in other Google projects.