Schmidt's decision has been borne out by events. Did Wave take off when open sourced? No. Did anything Wave-like developed subsequently turn into a big market? Also no.
> Did Wave take off when open sourced?
Eh, how many "dump and run" open-source projects take off? Bringing an opensource community to life is its own brutally hard problem.
I think Google's real error was not killing it too soon, but allowing it to be developed in a bubble and then springing it on the world with a giant, "Ta da!" It let them ignore a lot of real-world problems and questions, investing heavily in untested design hypotheses. Once you get to the point of a huge global launch, you've baked in problems in a way that is very hard to fix.
Slack.
Trello.