The request for pulling back the licenses and usage rights might be much more complicated than it sounds, since the code was released under GPL license which states that "parties who have received copies, or rights, from you under this License will not have their licenses terminated so long as such parties remain in full compliance."
Anyway, the tool itself wasn't for P2P networking, but instead it was aimed to provide a secure method for instant messaging and file-sharing with trusted users (each user has to be manually added to the contacts before user's files can be searched or messages can be exchanged, just like in AIM or ICQ). We can only speculate why AOL decided to pull the product -- maybe it was because of the GPL, maybe because of wrong interpretation by the press who labeled it as P2P software.
Nullsoft has managed to do such things to annoy AOL earlier as well. The original Gnutella P2P client was developed by Nullsoft's Justin Frankel and released on Nullsoft's site -- quickly after its release, AOL decided to remove the product.
More information:
Nullsoft
WASTE fan site
News.com
BetaNews
Aol.is.dreaming.org