It's worse than Twitter. Twitter made a strategic decision (correct or not) that applied across their entire business. Google are making this decision and calculating or hoping that it's in isolation from the rest of their business. That really doesn't seem to be the case.
For the rest of their business' life, Google APIs will be met with skepticism about their long-term prospects. That sucks, because it doesn't seem good for anyone. Not good for Google. Not good for their customers. Not good for 3rd party developers.
Per many comments left on HN, the people that this does benefit are the PMs. It seems that a well-worn path to promotion at google is to launch products. Hence, the reason we have umpteen chat apps. Once the promotion occurs, it seems, the product is all but forgotten, having served it's purpose: a raise.
The divocring of incentives at google are at fault. The PMs aren't incentivied to do what is best for google, as it conflict with what is best for the PMs' families, college funds, mortgages, and health care. Hence, they do what is best for them at the expense of google.
I've already held that opinion of Google products for some time after seeing what a ghost town Sites and Docs are, and the shutdowns of Reader, G+, Wave, etc. At best it seems that you can count on a product silently losing support for years as a hint that you should migrate.
For the rest of their business' life, Google APIs will be met with skepticism about their long-term prospects. That sucks, because it doesn't seem good for anyone. Not good for Google. Not good for their customers. Not good for 3rd party developers.