How bad could he have been? According to the parent, his software is used daily by that company. At the very least, they could have just hired him full-time and then stuck him in a remote cubicle by himself, reporting to one manager who just keeps tabs on him, and told him to basically just keep working on that, and if he has spare time, think of other convenient projects to work on that customers might like.
Perhaps they could have, but why? What would be gained in hiring him to sit there and do nothing just because in the past he wrote some code that a company happened to find useful?
I thought the consensus was that he was extremely skilled, and he's obviously proven himself at making very useful tools for that system. Why not hire such talent and put it to some use? Not all positions need to have a lot of team interaction.
You don't know someone else has the same skills and can perform. Lots of new hires don't work out (for technical skill reasons) even after passing the interviews; they're always a gamble.
Well, we know that the person in question has a low likelihood of working out. As before, other companies, like Apple, tried but were unable to make it work. As his personality demonstrates, and as the testing at Google concluded, he is unlikely to be a good fit for such organizations.
Sure, there is a slim chance that Google could have found the right fit for him in the end with the right accommodations[1], but why take the risk[2] when there are others lined up that are far less risky?
Of course there are no guarantees in life, but when playing the odds...
[1] That would have to be invented. Now you are also relying on the implementer at Google, which brings great risk on the employer getting things right even if the worker somehow magically came risk-free.
[2] Especially when the tests designed to try and estimate that risk raised red flags.
