After clarifying the legal situation we decided that our situation was untenable - I believe this has been explained both on these forums and the Elder Scrolls forums.
Equally, I believe it has been explained that the intellectual property rights to MEMod assets reside with the creators of the work, and they decide what to do with them.
Suzerain has just announced - see the
thread about releasing meshes - that he is preparing some of his work for release. As far as I know the game mechanics scripts may also be released - the last time I spoke to Wookiee he said he was working on it. Other MEMod team members have carried their work forward into the Phoenix Project, and into other projects they are involved in.
Permission has also been obtained to release some MEMod material on the website - again, that's currently being prepared.
The only stuff which could perhaps be said to be 'going to waste' is the large amount of Tolkien specific research carried out.