The source code was way too incomplete to be compiled, but the complete E3 alpha was released later, and was playable in itself.
However, a competing game company, for example, could've used some of the code as a basis for their engine, and nobody would know.. It's Valve's property, in which they've probably invested a good deal of money in the form of man-hours, so understandably they don't want other companies profiting from the code (modified or not) for free.
The source code was also used to write the first game resource decompilers, which in itself have been valuable tools to the modding community, so that's kind of a two-sided axe.