interesting how King Edward gave the palace away against his mothers' wishes ... no member of the family seemed to love the place particularly.
I don't think that's entirely true. I think most of Victoria and Albert's offspring had happy memories of their time there as children. Beatrice especially was upset at the idea of the house going out of the family; she had never had an independent home of her own, and Osborne was very close to her heart.
The problem was probably money. It took a monarch's vast private income to keep the place up -- it was pretty big, big enough to house Victoria's court. She had also added a big addition, the Durbar Wing, in the 1890s, to allow space for her growing family of grandchildren and great-grandchildren for Christmas gatherings.
Of all her children, only the new King could have afforded to keep it. He already had to pay for the upkeep of Balmoral and Sandringham out of his private income. (He inherited Balmoral from his mother, while Sandringham had been his own country home for all of his adult life; Buckingham Palace and Windsor are the property of the British government.) Both Sandringham and Balmoral are used recreationally mostly for blood sports -- shooting grouse, pheasant and other game birds, deerstalking and fishing. Osborne, by contrast, was a seaside house with a private bathing beach, which the new King found less appealing than spending his leisure time killing things.
The status of Victoria's children at the time of the Queen's death:
- Victoria, Dowager Empress of Prussia was dying of spinal cancer at her castle in Germany, Schloss Friedrichshof. She herself would pass away six months later.
- Edward, the new King, didn't want Osborne House -- with Buckingham Palace, Windsor, Sandringham and Balmoral he had residences enough.
- Alice, Grand Duchess of Hesse-Darmstadt had been dead since 1878.
- Alfred, Duke of Edinburgh and Saxe-Coburg had died some six months before.
- Helena, Princess Christian of Scheswig-Holstein, had a country home near Windsor called Cumberland Lodge, as well as Schomberg House on Pall Mall in London. The couple could barely afford the cost of these two residences.
- Louise was (unhappily) married to the land-rich but cash-poor Duke of Argyll, and was chatelaine of Inveraray Castle in Scotland as well as spacious apartments in Kensington Palace. (I believe it is her old apartment at KP that has now been given to the Duke and Duchess of Cambridge). She had a cottage on the Osborne grounds as well.
- Arthur, Duke of Connaught had a splendid country home in Surrey called Bagshot Park, today the residence of the Earl and Countess of Wessex. He used Clarence House at St. James's Palace, now the official residence of the Prince of Wales, as his London home.
- Leopold, Duke of Albany, the hemophiliac son, had been dead since 1884.
- Beatrice, the widowed Princess Henry of Battenberg, had lived with the queen her entire life and served as her personal secretary. She had use of the suite of rooms at Kensington Palace where her mother had spent her childhood, but no country home to call her own. Like Louise she would be given the use of a cottage on the Osborne grounds, which she made her principal residence for the rest of her life. More than any of her siblings, she assumed a prominent role in the public life of the Isle of Wight.
The only other possible inheritor of Osborne was the new heir to the throne, the future King George V, who could have afforded to keep the house with his income from the Duchy of Cornwall. He was offered the estate but declined it, preferring to keep his growing family crammed into York Cottage, his house on the Sandringham estate. He loved the flat Norfolk landscape and the endless shooting more than any other life.
Since those who could afford Osborne didn't want it, and those who wanted it couldn't afford to keep it, the house was offered to the nation and became a junior officers' naval college and, during the Great War, an officers' convalescent home. Today it is open as a tourist attraction.