It is used in a couple of departments across our parent organization (Infogroup) and solely by myself in my organization (Yesmail). I can only speak to how I use it on the Yesmail side, not the Infogroup side. It is used primarily as a content repository.
It is very laborious process to get the content into Qvidian. Once it's there, it's great - but getting it in is very time consuming.
Moving content around is difficult. They got rid of the drag and drop feature so moving content from one folder to another takes much, much longer than it used to.
I don't use Qvidian as a project management tool or to send things out to knowledge managers. I am the only one on my side with a license, so I don't use it to the full extent of it's capacity, but the process seams fairly difficult.
I wasn't involved in the selection process, but I think the biggest question is ease of use and intuitiveness. To use it to the full extent of it's features, you really need full buy-in across the organization. I would think that would be the biggest obstacle.