The source code has zero business value to Google at this point – they have another smartwatch OS and there's never gonna be a business case for a company of Google's scale to revive a niche product like this. Releasing means getting free PR on Hacker News and a free morale boost for employees who care about this kind of thing.
Unrelated to smartwatches, but the usual reason that I've heard on why video drivers are not open-sourced directly (AMDGPU =/= AMDGPU PRO and Nvidia's recent parallel driver efforts) is that there are copyright (old code that is not written by ATI/AMD or Nvidia/3dfx and AMD/Nvidia not getting the rights to it) and patent (techniques used may be patented by their competitors) concerns.
Isn’t it valuable to Google to keep potential competitors from getting expensive IP for free?
“PebbleOS took dozens of engineers working over 4 years to build, alongside our fantastic product and QA teams. Reproducing that for new hardware would take a long time.” [0]
It's 12 years old. They put good work in. But it's missing an absurd amount of stuff the mass market considered mandatory a decade ago. Consumer electronics, for better or worse, is mostly about spending enough money to get your product name in front of hundreds of millions, and Google knows that well.
