This really makes it sound like Vic was essentially fired. I wonder how much Facebook's recent success in monetizing mobile is at the root of this? For a long time the conventional wisdom was that there was no money in mobile at all and it was a huge problem. Now Facebook is killing it, and Google's answer seems to have missed the mark. Although this article is all loose rumors and speculation, if you piece it together the picture feels believable: Google is seriously worried their bet on G+ is wrong. Until Facebook starting doing big numbers Vic had the benefit of the doubt, but now that it's clear in stark numerical fashion that Facebook is actually increasing it's lead over Google it's causing a serious rethink.
Personally I hope it does push Google to rethink G+. It doesn't take too much: step back a little, stop pushing it aggressively where it doesn't fit. Actively support pseudonimity - let people have their privacy AND their G+ cake and participate in multiple circles under different identities. Add APIs to let a 3rd party ecosystem develop. Encourage it. Yes Twitter wound it back but only after they were the undisputed leader. Fingers crossed.