AFAIK it was built as a wholly separate entity, used a third party engine and was, for reasons not explicitly stated, considered not feasible to integrate to EVE, all of its assets and work on it went to waste. However I find it amazing that CCP of 2007 managed to build a far more complex WIS work-in-progress than CCP of 2010, while they were also working on the biggest expansion by then at the same time, while not having even as much money or resources as they do now. Footage of it, screencaps above, were showcased on fanfest in 2008 IIRC.
Seriosly though, biggest ball ever dropped by CCP. One thing I'm honestly bitter about.
That said, I can understand that they want to gut it seeing the usage metrics and the upkeep it needs, and can't really blame them for removing a half-finished product that keeps other things on hold because of it.