The "Googlers"? Marketing and business persons did this. If you have followed the story, there were posts describing how actual developer googlers used and loved Reader, and even tried to save it.
Seems like you bought hook line and sinker the BS PR copy they give.
For one, their core business is ads. Not search itself, not Android (a loss leader) and surely not flying robot cars.
Second, nothing "hackish" or "impossible" about most of which you describe.
Only the "web search engine that automatically finds the useful sites" fits the profile --and that's based on that Stanford research the founders did, not Google work. If anything, it deteriorated over time, with BS non results and meddling with it to promote ads and/or G+.
And even that was hardly impossible. The Chinese search engine Baidu is based on similar tech, which was also created in the US, independently of Google, around the same time (even actually predating PageRank (it's even mentioned in Google's US patents).
An "an email system with a hundred times as much storage as any other webmail system" was just a matter of resources and monetizing, not some special technology.
A "a draggable and zoomable world map in a browser" was bought from another company.
"gigabit fiber to the home" is offered in many parts of the world. That the US lacks in this area, is not something
"a free-software smartphone" -- what's innovative about it? They make money from ads. They give the software for free (especially since it was based on Linux and a modified Java SDK). And it's not like they made a killing off of it -- Samsung did.
"an easy-to-use system for writing fault-tolerant massively-parallel programs" What's that? Go? Because you make it sound like the created Erlang.
Etc. The rest are "robot cars" and "google glass" -- mainly half-baked prototypes, that tons of other companies would have put out if they a) have the money, b) liked to show half-baked stuff years ahead of any release date.
And "baloon internet". A PR stunt if I ever saw one.
To pick apart your post:
* "main area of expertise" is not the same thing as "main source of income".
* RankDex or for that matter HITS, is not the same thing as a search engine that you would actually use in preference to AltaVista; 1998 Google was already better than AV for the things that were in its index. Baidu didn't exist as a company until 2000.
* "just a matter of resources and monetizing" is hindsight bias. Hotmail was so sure Gmail was an April Fool's joke that they issued a response press release in which they offered more space than Gmail. The fact that Gmail was capable of offering two orders of magnitude more machine resources was, in large part, a result of internal infrastructural innovations at Google that weren't copied at other companies for many years. Of course, some people dismissed it as a "PR stunt".
* Where2 had a downloadable C++ desktop maps application and an idea about doing it browser-side when Google bought them. Gmail and Google Maps popularized AJAX, which had been previously considered impractical, despite our efforts at KnowNow.
* By "many parts of the world" do you mean a few apartment blocks in Seoul, Hong Kong, and Tokyo? I don't really think Kansas City is comparable in either density or wealth.
* I don't care what's innovative about Android (which, you forgot to mention, started as a separate company, like Where2). I care that I don't have to sign my first-born child away to Apple to program my smartphone. I'd care a lot more if Google had actually achieved what they set out to achieve with Android.
* If you're equating SquirrelFish (pre-Extreme) to the first release of V8, you're living in a fantasy world. There was an order of magnitude difference. Apple and Mozilla closed the gap substantially in the next few months because (a) V8 showed it was possible; (b) V8 showed how it was possible; and (c) V8 made it necessary.
* I meant MapReduce, which is another of those things that's obvious in hindsight, but was actually far from obvious, and which underpins nearly every data-heavy startup today.
* "Would have put out if" is Monday-morning quarterbacking, just like your hindsight bias on the other items. And there are plenty of companies with more money than Google that don't have robot cars on the road.
We'll see what happens with the robot cars and balloon internet. I think there's a substantial chance they'll fall far short of hopes, just like Wave (which I notice you didn't mention), but that's the way it is when you try things that may not be possible.
I'm not actually all that positive about Google, but I think that if you want to understand them, you need to understand what they value. You can do that without thinking, yourself, that it's awesome.