After making a gesture to prove that he's a nice charitable guy who's interested in seeing Diaspora succeed, he likens it to a project deemed illegal by the CEO of his company.
He likened it to WireHog since both use peer to peer technology with some social networking aspects. WireHog was deemed illegal because it was designed specifically for file sharing. Diaspora is not designed specifically for file sharing and more for information sharing.
OR, it wasn't worth the risk for Facebook a quickly growing company at the time. However that type of risk my be worth it to a startup that is just starting and has many other more serious risks to worry about (like no one using their product).