Thanks for the correction, Paul (and for the great email client and JS Compiler!). I've added a note to the article.
The focus on inlining as a performance win makes a lot of sense. It's hard to get back into the pre-JIT IE6 mindset where every getter and setter came at a cost. By the time I used Closure Compiler years later this had gotten simplified to just "minification good". I remember search (where I worked) in particular was extremely concerned with shaving bytes off our JS bundles.
To be clear, minification was absolutely a key feature/motivation for the compiler. Runtime performance was more important than code size, but as usual the key to improving runtime performance is writing better code -- there's not much a compiler can do to fix slow code. For example, I wanted the inbox to render in less than 100ms, which required not only making the JS fast but also minimizing the number of DOM nodes by a variety means (such as only having a single event handler for the entire inbox instead of one per active element).
As other here have pointed out, JS was very much looked down upon by most people at Google, and there was a lot of resistance to our JS-heavy approach. One of their objections was that JS didn't have any tooling such compilers, and therefore the language was "unscalable" and unmaintainable. Knocking down that objection was another of the motivations for writing the compiler, though honestly it was also just kind of fun.
The focus on inlining as a performance win makes a lot of sense. It's hard to get back into the pre-JIT IE6 mindset where every getter and setter came at a cost. By the time I used Closure Compiler years later this had gotten simplified to just "minification good". I remember search (where I worked) in particular was extremely concerned with shaving bytes off our JS bundles.