Indeed; it felt magical, but was a solution in search of a problem... which was ultimately found in Google Docs having very similar live editing ability.
Also its rollout was done in the most ridiculous way possible. For a product that relies on your workmates or friends to have access, they didn't let those workmates or friends have access. Then by the time they did, the hype had worn off, and people had moved elsewhere.
I can't tell if you're talking about internal rollout of public because the same problems existed internally. One person on your team would request it because they bought the hype but not everyone had access so only that one person would play with it and the social aspect of it just wasn't there. I tried to make it useful for a couple weeks but my impression at the end was the same as when they did the TGIF demo: mostly pointless fluff.
Killing it just wasn't as painful.