Don't know why yours is taking so long, but the following is just an amusing in-place alternative:

#!/usr/bin/perl

use strict;
use warnings;

my $filename = 'file.tabs';

local @ARGV = ($filename);
local $^I = '.bac';
while (<>){
    chomp;
    $_ = join(',', map {qq{"$_"}} split "\t") . "\n";
    print;
}
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I agree that Text::CSV_XS is probably the way to go though.