We are using Wave for collaborating on projects, because none of us work in the same office. It was perfect for that, and it was free.
It's a shame they're throwing it away. I would have seen Wave as being another widget of Gmail (like Buzz). That would have given way more users and quicker adoption. And it kind of fits together really, it's just a mix of email and message board really.
So yeah, big mistake.
And with the dropping of Nexus One, the big G is closing a lot of stuff.