I think it's just a classic network effect problem. Invites worked for gmail because you could still continue to interact with everyone who had an email address

I think it's just a classic network effect problem. Invites worked for gmail because you could still continue to interact with everyone who had an email address. With Wave, you not only had to be invited, but you could only communicate with the small set of other people who had been invited. I used it exactly once and gave up on it.