Wave needs a critical mass of users to be useful so that created difficulty with no existing (public) service after Google shut their instance down.
Google completely botched the roll-out. Wave is essentially useless without others to use it with (no value above Google Docs to use it solo, or standard email/IM to chat with others). I had 10 invites, I sent most of them out. Only two people of the 7 or 8 I invited received their invites. It was completely useless to me because one of the two was someone who just wanted an invite (but I didn't interact with much), and the other was an fellow tabletop gamer and the rest of our group couldn't get in.
When Google finally opened it (looked up dates, I remembered it was short but didn't recall it being this short) to the general public it was May 2010. They announced that they were going to stop developing it (switch to sustainment with plans to shut it down) in August 2010. They gave the service 3 months, and said it didn't have sufficient interest.
No shit, it was three-damned-months!
As best I can tell, someone at Google had intended to shut it down from the start. The fact that their attempt to launch it failed doesn't mean that the system (or its concept) had no potential. But killing it did kill the potential, because you needed that critical mass to gain any value from it.
It had federation which would've been useful, but with no public instance there was little reason for a small group to run their own instance. There was no one to talk to.