The original story I heard was that it encouraged people to stop using images of text on the web (which used to be a common way to get custom typography in pages). The images of text are hard to index and search because they would require OCR and would lose other possible semantic information that might be present in a textual page. So Google hoped that people would choose to use these fonts and then represent textual information as text rather than as an image. It seems to have worked!
That makes perfect sense. Thanks.
Yes, you hotlink the web font files from their servers. Much like their public DNS servers, their public font registry pays them in data.
Yeah, I assumed this too. They have a reason for every service they offer.