Why wouldn't you think that? Google doesn't have unlimited money to build a nation wide network overnight and even so this would only give us two players. You need at least 3-4 players if not more to have real competition.
Competition isn't the end goal; what we really want is the service and prices to be at least as good as what a competitive market would yield. Google Fiber may not be all the way there, but it's close enough to be a great interim option.
Yes, Google fiber looks great right because they are only in a couple of markets. Building out nation wide would cost a lot of money and time...
Google already runs most people's cell phones, search, browser, email, mapping service, etc. so it seems to me being one's ISP also potentially could be really bad.
Your second statement is just wrong...