The most fundamental problem at Google, of which bad UX/UI is one symptom, is that product management has no real power there. Engineering has all the power there, and basically does whatever it likes. It takes product management research as "input" for its decisions, but does not share power with product management.

Strong, competent product management balances user needs, marketplace conditions (competing and complementary products), and technological factors to create optimal products. What we see from the outside are products that are technologically strong, but suffer from lack of useful user perspective and market awareness.

Google will never create new (i.e. post search and AdWords) great products until it undergoes a complete cultural transformation toward a product management-focus.