I don't think there's any one single reason why the code base is huge. Its written in proper idiomatic java, so a lot of the code is bureaucracy (interfaces, factories, managers, assertions, etc). The code that was opensourced is reasonably representative of the rest, if you're curious:

http://code.google.com/p/wave-protocol/source/browse/#hg%2Fs...

I think we should have spent more time keeping the code clean; but thats always a tough call when you have features to ship. Its easy to point to lots of things and say they were mistakes. But I worry that, had the project been successful, we might point to the very same things and talk about how clever we were.

A huge effort was put into making the client more responsive in the few months just before wave got cancelled. I'm not sure if its still the case, but at one point wave was loading faster than gmail. We were a month or so away from shipping server-side rendering of waves with progressive enhancement for editing. That made waves load in a snap. (The guys finished that piece of work and put it in the opensource wave in a box project.)

You weren't alone in getting a lot of value out of wave. We used it internally for everything. When we had meetings, we shared the agenda in a wave. People edited the wave with meeting items, and during the meeting people collaboratively annotated the agenda with what was decided, turning into the minutes. It was a thing of beauty. I still think there's a need for something like wave - it solves real problems.

When wave was cancelled, there was a series of honest retrospectives internally on different aspects of the project. I hope they get eventually get published eventually too. A lot of people were quite career-sensitive after wave. Most blog posts you see by wave developers are written by people who have left google anyway.