Board Thread:General Discussion/@comment-6036560-20130318104316/@comment-4260948-20130425021008

Regina, who CAST the curse and had some control over it, allowed Owen to go. Kurt was her prisoner - what better way to tie up all loose ends? A crazy disbelieved child and a memory wiped old man?

Besides, Owen and Kurt were caught in the smoke when the town appeared and were inside the boundaries of Storybrooke Wood at the time, so would have been affected too.

Owen did, after all, CRASH INTO HOOK on his return to Storybrooke, so Kurt losing his memory is entirely possible.

There are 4 options, really

1) dead

2) imprisoned

3) he's the janitor in asylum

4) he lost his memories crossing the town line.