Can't say this is terribly shocking. We were ready to believe, and tried using it internally and with a client to collaborate on a project. Even internally, none of us could really see the benefit when compared to Basecamp or just using Google Docs and good old fashioned email/IM.
When we tried to use it with a client, they were so baffled I can't begin to explain it. I will admit, that they are not big fans of digital collaboration tools. But even so, it was not a good sign that they had as many problems with Google Wave as they did.
It was a noble experiment, but unlike Google deciding to stop supporting Notebook -- this one I can understand.