It's worse than Twitter. Twitter made a strategic decision (correct or not) that applied across their entire business. Google are making this decision and calculating or hoping that it's in isolation from the rest of their business. That really doesn't seem to be the case.

For the rest of their business' life, Google APIs will be met with skepticism about their long-term prospects. That sucks, because it doesn't seem good for anyone. Not good for Google. Not good for their customers. Not good for 3rd party developers.