I love stabilized wood, but only if it's the "right" wood and is properly stabilized. Some folks treat wood with cyanoacrylate and call it stabilized, but the only truly stabilized wood is treated by placing it in a vacuum chamber while it is immersed in a polymer resin similar to that used in CF composites and G-10.
As for the "right" wood, that's somewhat counter intuitive. Because stabilization depends on the wood's ability to absorb the resin, dense woods and oily woods, such as desert ironwood, do not stabilize as well as softer, dryer woods.
As for "how", I'd love to see more properly bolstered Spyderco midlocks (as opposed to abortions like the Sage 4) with wood scales, but don't honestly see that being in the cards. What might sell is the corrugated look as in these Stretch scales in black palm by Steve Ketchen...
...or these in cocobolo by suingab
As an aside, there are other, interesting forms of "vegetable matter" that can be stabilized as well. Mushrooms and pine cones come to mind. And then there's "plastination", a similar technique used on "animal matter".