I don't think the closed beta-ness of wave really hurt it. If wave had actually worked well, then maybe there'd have been a point where it was worth opening up to many users - but wave never got there, so it's a moot point.
Google+ falls down for mainstream users, though, which is where the "no one here" perception comes from.
If memory serves, Google Wave was the same way: great for the people who used it, but the value wasn't perceived by the majority.
That meant, we couldn't use it at work. And of discussion.
Chat integration is arguably simpler - and Wave already understands XMPP (for federation), so it would be possibly to map Jabber -> Wave (say). How you would want to map from Wave -> Jabber is more complicated (as any blip at any point in the tree, can be edited at any time, by anybody)...
Editing existing conversations: http://imgur.com/a/GtGY6 Inline replying: http://imgur.com/a/Dkefp
Disruptive communication is hard, and they lost this gamble. That does not make it an error :)
(Snapchat, Whatsapp, etc, all are things int he "must fully jump onboard or ignore it", and they've done fine, because they are incremental improvements that are less disruptive).