The unofficial line when I asked a few months back was that it was not going to see open-source because it would be too embarrassing. Apparently a lot of the manhours that were supposed to make it passable to the public ended up being rushed into solving the early issues of Demigod.
So, the rumours of there being pictures of Frogboy without pants in ascii format in the source are true?
I'm shocked I tell you, shocked!
--------
As for the topic, usually one doesn't release the source code of something you expect to use in the future for free. (Don't ask me why though.) The underlying engine for WoM and FE are very similar after all, so in releasing the source for WoM you also probably release most of it for FE and the like. :/