So I'll get right to the main question.

If a multiplayer game engine does not support C#, how big of a detriment is that?

I have a JVM based multiplayer engine that I spent most of the last year working on, and I'm getting close to an initial release. You can extend the server or write game logic in the JVM language of your choice.

I do have the option of adding support for C#. Embedding mono in the jvm actually works fairly well. C# would never be a first class citizen, but it would work for a lot of use cases. I'm worried about going down that road though. Trying to please everyone vs keeping things more focused.

On the plus side the core engine will be open source. Still working out the details because the licensing is tricky. Normally I would use the GPL3, but that's fairly useless for game development because the engine architecture would result in game code falling under the GPL3. I've been fairly active in open source throughout my career, and I've just gotten really jaded by larger companies that take but never give back. So I'm trying to find a way to keep a liberal license for individuals and startups, and at the same time force larger companies to contribute back changes they make to the core engine.

Anyways, interested in opinions on the whole C# issue.

C# (and C++, and C...) have been the dominant industry languages, but have not been the only languages used. Many famous games were written in other languages. Performance considerations have lead developers to stick to manual memory management, which mostly meant C++, but that's changing.

I'm sure some people will weigh in with opinions on C# support specifically, so I'll focus on what I feel are the underlying issues. I think a more focused question might help: why did you make the engine in the first place? Who are you hoping will use it? You know the answer to that better than I would, and I tend to think that following that guide will produce the best outcome. Figure out why someone would use your engine and who they are, and target that. There are already a bunch of engines that support C#, why would someone pick your engine over, say, Unity?

On licensing, I don't know what platforms you are targeting, but keep in mind that LGPL (which would normally be somewhat useful here) requires dynamic linking, while mobile platforms require static linking. Unity ran into this issue with their implementation of Mono.

To be honest, lacking C# support will most likely not been an issue, but GPL3 will be . There are many successful java-based multiplayer games around (eg minecraft), so try to focus on one jvm and polish your engine, instead of supporting many VMs.