Yes, but you realize that this is a self defeating argument, right? People who aren't using IE had to install the plugin themselves. Doesn't impact people who do use IE, the target market for this Google plugin.
I did recognize the irony: users who've installed browsers have needed to install plugins, users who haven't installed browsers haven't needed to install plugins.
The extremely wide spread of IE toolbars and other ActiveX plugins shows that Google will garner installs. They'll probably also have the OEMs they're paying to bundle Chrome install Chrome Frame too.
Hell, they might even stuff it into the Google Toolbar for IE -- which has tens of millions of mostly paid-for installs.
For Flash to work in any Windows browser not based on IE, somebody has to install the separate NSAPI flash plugin.