Interesting. Would you mind revealing your level?
At Staff Engineer and above, the levels are more about the scope of your responsibilities at Google, and while compensation is somewhat correlated to that, there are other factors.
If you can drive huge amounts of value to the bottom line, either via innovations that save the company $$$ or by working on a project which is "up and to the right", in my experience sooner or later you will be compensated for it --- either at your current company, or somewhere else. Google is pretty good at making sure it's "at your current company".
And so long as you are doing something that you love, does it really matter what level you are at? Personally, for me it's less about the money, since I have enough to be comfortable, and I haven't gotten really expensive habits (like wanting to learn how to fly, or drive race cars, or children to put through college :-). So it's it's more about doing what I love, and doing it in the company of smart people who are fun to be with. Figuring ways of making this intersect with adding as much value as possible to the company is just a bonus.
As far as the need to continue to derive new value to the company, of course! This is true everywhere; the phrase "what have you done for me lately" is one that is not unique to any one company, and would _you_ respect someone who did one great thing many years ago, and then proceeded to rest on his or her laurels?
Of course there are many different ways of adding new value. If you can demonstrate how a new cache server is faster or more scalable, and thus can drive value to the company, that's certainly one way. Or maybe there is new technology, such as faster networking technology or faster flash storage, which means that assumptions made five years ago are no longer true, and that can be a justification to rewrite some part of the infrastructure. But Google is a data-drive company, which means you need to be able to justify why the rewrite is necessary.
This is why life is sometimes easier for the infrastructure teams; increasing disk or CPU utilization by even a fraction of a percent, when multiplied across a large number of systems, can be a big number.
Now, if your product which is measured as having a small number of users, and worse, that number is decreasing over time (which was the case with Google Reader, as has been publicly disclosed), the problem is not that you don't have metrics, but the metrics aren't telling you want might have necessarily wanted to hear. Down and to the right; that's a different story...