Probably the most ridiculous thing I've ever heard in my entire life. There were only two minor factors holding Blue Mars back from launching.
A better client with more native interfaces and just better user control in general. This is probably the most important feature that seemed to be overlooked. I'm not sure why they didn't finish this, but I guess we'll never know now.
Small developer accessibility. To be a developer in Blue Mars, one had to be a professional 3D Artist or a professional game designer, before ever being able to create any sort of content. This was probably the most important factor in the lack of developers coming into Blue Mars.
It looks like Second Life, will be the sole competitor in the Social Environment for at least another few years. It is a sad day for the next generation in Social content.