Looking back, I regret not open sourcing it as well. Pre-.NET, we didn't want to spoil our cross-platform competitive advantage. Post-.NET, we didn't think there was much of a market for a VBScript-to-C# transpiler (wouldn't those people prefer VB.NET?), and besides, open sourcing it seemed like a lot of work for basically no benefit.
I get that, running an open source project can be very time consuming and expensive, and once it starts it becomes a part of your brand that cannot necessarily easily be dismissed. So it may have been wise not to open source it. I do think though, that wasabi was not obviously stupid or anything, and it probably could have had some amount of success in the wild.