At the time, several of us were telling our friends working at Google to start from Reader comments. It was already a functional and somewhat popular social network.
Instead of that, they removed the comments and replaced them with something worse that no one ended up using.
Google should have built out Reader as its Twitter competitors, and Google+ as a separate Facebook competitor.
The former would be a more impersonal source of information and discussion, whereas the latter would have been where you put your personal connections.
Unfortunately Google wanted to do both in the same product, and thought that Circles would be sufficient to create the distinction, but the kind of stuff someone might want to expose to an impersonal connection is drastically different from the kind of stuff they want to expose to personal connections, to the point that they should arguably have completely different UIs.
Circles seems like the sort of feature that would appeal to power users (and indeed I remember a bunch of academic type people using Google+?) But most users are not power users and don't want to do a bunch of thinking about what circle each contact belongs to.
Nevertheless it seems to me like the network effect was the main thing, and Reader could've been a huge step there.
Instead of that, they removed the comments and replaced them with something worse that no one ended up using.