The failure to get those two in the ring surely isn't the fault of any one person. When you're talking about Vince McMahon, Hulk Hogan, and Steve Austin, you're talking about three tremendous egos. I'm sure there were plenty of prideful blunders by all three.
To me, though, it isn't a big mistake. The only time I remember getting excited for it is when, at the Hall of Fame ceremony, Austin said he had a can of whoop ass with Hogan's name on it. Other than that, the match was always something unattainable to me. Even though Austin and Hogan were contemporaries, and even though I'd seen them interact and even wrestle a little, I still always thought of them existing on different planes. It's almost as if deep down I knew the match would never happen, so I never got worked up about it.
Even if all three guys secretly think it was a colossal eff-up, though, it's a moot point now. Hogan can't bump, Austin probably shouldn't, and Vince is probably warming up to the idea of entering some sort of semi-retirement in the not-too-distant future.
It would have been a fun match, to be sure, if only for the "wow, this is really happening" factor. It certainly wouldn't have been an in-ring classic, but would anyone have expected it to be? A match like this is all about spectacle and atmosphere, and that alone would have had most penciling in their first three stars and waiting for the finish before filling in one or two more, depending on whether the reviewer was a bigger mark for the winner or loser.
It was more of a missed opportunity than an outright mistake. The Rock, IMHO, was the right choice. He had more career left, was healthier, and was pretty much Austin's equal in the WWE pecking order at the time. I think things went down the best way they could have. I'm of the mind that that crowd in Toronto was going to boo whoever it was that Hogan faced, and The Rock absorbed it like a champ. Not saying Austin wouldn't have, but The Rock's charisma and willingness to pose down and interact with Hogan made for a memorable post-match scene as well. And hey, Austin-Hogan might not be completely out of the question-- maybe one of Steve's daughters will get into the business and fight Brooke Hogan.